What you’re describing there is simply the more aggressive option of placing the reverse bet on a failure to break to new lows after a series of bearish bias peak-trough steps, or a failure to break to new highs after a series of bullish peak-trough steps, as you’ve very clearly described in respect to today’s 4280 level.
It’s not my place to either encourage or discourage you from following a particular stance, only to help you identify the potential benefits & pifalls & ensure you’re fully aware of the inherant risks.
But to be honest hawkmoon you come across as a very astute, switched on individual & just reading that post tells me you’re probably already more than well aware of the likely risks, & potential benefits of striking out early on tend continuation failures.
If you feel comfortable legging into higher low or lower high confirmation bets such as the ones you’ve just explained, then as long as you can compute acceptable risk to value ratio’s & they tie in with average range numbers, you’ve covered your bases.
Risk attitudes & trading objectives are extremely personal & will differ wildly from one individual to another. The only way you’ll satisfy yourself that it’s a viable option is to test it out & keep records of the results so you can accurately assess & track the progress/viability, as I’m sure you’ve done when constructing your present strategy.
If I were you I’d take the latter option of those 2 today.
I’d be very surprised if you haven’t already had a pretty decent week judging by the way you present your understanding of your strategy in relation to the markets comings & goings.
With Bank stress tests & the Italian austerity vote on the front burner, things might get a little frisky heading into end of week. Volumes are on the light side so far this morning, so it looks like a lot of the usual aggressive candidates are headed for the exits for an early w/end.
Been a busy week, go get a beer
DoubleEcho you are corect, it is resembling a yo yo today tradeing in a directonless range. i’m still however a litle smileing today becose the aggressive entery that jocelyn confimed when price failed to make a higher high has still remaned in a posative positon and in fact offered up another nice dual hook entery thrugh 1.4165 earlier
The hour chart structeur is continue to make the lower highs this morning dureing europe trade down to the 1.41 round number. but i am happy to watch all this and be confidant to keep spotting thes opportunity’s as they appear so often. it is all good experience.
enjoy the weekend to all.
thes are always things that can cause dificult tradeing conditons and when they are released later maybe it will cause some extra volitility.
It’s continued to drop away nicely from those observations you noted during last Thursday afternoon hawkmoon.
I’ve spotted that type of scenario too during my testing of this strategy over the past weeks & I agree with you, it’s a very good risk minimiser when price displays early signs of turning over on new high or low failures on that hourly timeframe. It provided a similar early short signal set up on that pair at the beginning of July when 1.4580 hit a wall by forming a lower high.
It’s also proved a very lucrative signal on the Swiss currency since the beginning of this month too as it’s benefited directly from the fear & risk aversion in the markets of late.
That tactic quickly identified the potentail turn in EUR/CHF (the closest recipient of the recent risk attitude) off 1.2350 when all this negative risk began developing, & with the assistance of the 3 ducks hourly moving average & the structure of the info in this thread, price hasn’t broken back above a lower high once since that turn.
I’ve decided to go live with the strategy this week. The structure is very easy to set up & track, there aren’t reams of analysis to perform beforehand & the most attractive feature being it follows & conforms to a logical sequence of technical events.
I’m sure the more experienced guys will correct me if I’ve omitted or misrepresented anything, but so far I can sum this up in 3 basic steps.
1] Identify a clear trend or bias on your primary timeframe of choice.
2] Trade in harmony with the trend on that particular frame or utilize a dual (primary/secondary) option, paying particular attention as price approaches & reacts to:
prior week & prior day highs-lows
prior s&r zones clearly visible from the left of the chart
round numbers & combinations of the above.
3] Use the average day & week range percentages to assist with bet management including entry, target planning & risk.
It’s quite obvious you haven’t fallen in here off the nearest Xmas tree. Your take on the structure & triggers is fine, no problems at all. I’d wish you luck just as a friendly curtesy, but you won’t need it.
You’ll have a ball if you just follow the concept of buying dips/selling rallies on the secondary charts in tandem with the bias on your primary leading chart. After all it doesn’t really get much more basic or simple than that does it.
To be honest, & this is no slight on Andy’s 3 ducks model, but after a short period of time you won’t even bother referencing the slope or angle of the moving average because the natural ebb & flow on the hourly will quickly establish your smaller (secondary) timeframe bias & get you safely in & out of the market whenever you want.
It’s slow enough to offer a realistic representation of the current market themes & influences, whilst fast enough to be able to employ smaller timeframe triggers to leg in & out with relative comfort & safety.
You’ll also find it more than capable of offering both intraday & longer time horizon opportunities when trading this style of structure. For what it’s worth that’s my experience anyhow & I know Kevan & catcher will agree, because they’re working the same deal.
The odd times I require a bit more background info I’ll dial out on the next upper timeframe until it tells me what I want to see. I’m only really interested if the big timeframes are showing indecision or neutral behavior at a level that’s proving stubborn or represents a potential exhaustion point in the market.
For instance, Friday’s daily candle printed a doji on my charts as did the daily candle up at the level you identified earlier at the beginning of July at 4580. That’s the type of stuff (dojis, spinning tops, inside range bars, 2 & 3 bar reversals etc) that will rank a second glance & prove helpful when confirming decisions on the hourly & sub hourly trigger charts.
Whenever I open up my trade platform the only thing that concerns me is if I should still be continuing to either sell rallies or buy dips, that’s it.
The less information I need to access to give me that detail the better.
I’ll just add that when you’re more established & you’ve got your stall set out, you might consider exploring the possibilities of adding a decent squawk or newswire.
You’ll get a regular stream of input including market generic & currency specific updates, links to articles & cross market influences & offerings that are driving & impacting prices across the short & medium term.
It’s not like you’re going to be using it to make snap trade decisions, as it usually takes a day or two for any genuine market moving info to become fully absorbed. But it’ll give you an insight into how & why the technicals react & adjust to the type of stuff the influential market players are dialling in & out of on a daily & weekly basis.
If you decide it’s not for you then fair enough, but I’d recommend you give it a whirl.
Do your homework as you’ve done here & ask to trail a selection of material first. That way you can ensure the suitability of a particular providers delivery style.
They’ve mentioned & referenced one or two on here already so you could start with those & work from there.
Cheers Carll. It fell into plce quite easily as soon as I started physically demoing it. I’m not really anticipating any major hitches at all given the simplicity of the structure.
The only hiccups I’ve experienced so far are when trading conditions become directionless & rangey on the 60 minute chart. That obviously cascades down onto the 5 & 15 minute charts as choppy & erratic price action.
I’m assuming most of the entry failures will be associated with the types of conditions where I’m entering as the bias is in transition. That will be the time to either stand aside & wait for more confirmation, switch across to another pair or swap to a more appropriate strategy.
I appreciate what you’re saying. That pattern occurred again yesterday as price began forming a higher low off 4070-4090 due to the failure to continue forming lower lows on Monday through 1.4015
It gave plenty of time to begin preparing for your hook entry opportunities (switching to the long side) which began signalling during yesterday’s european session as price climbed through 4100.
There was certainly plenty of upside room left in the average days range taking entries around that level, with good risk placement to check out the potential upside movement.
I’ve already started to dip my toe DoubleEcho. I’ve crossed out DowJones & am currently perusing MNI. I’ve also contacted fxwire pro & Ransquawk for further details.
That side of it interests me & it’s not like I’d allow it to distract or deter me from my strategy goals anyway.
For me, I’m only looking for longs above 1.42 and right now it’s moving well. Let’s see if there’s a nice retrace to enter on and if I’m around to catch it.
I suppose it depends on how you’re viewing & incorporating the accompanying information. I don’t see the aggression that you see.
Price formed a mini double bottom on Monday which suggested an unwillingness to continue lower. That’s the first & most important sign of a potential stall in the bias.
The 15 minute chart formed a bullish doji type bar on the pullback from the asian session & both smaller timeframes were hooking from extreme levels right off the european open. And that time horizon is one of the key elements of this structure.
If the continuation move is a fake out then I want to get hit at my minimum pain threshold, which is directly underneath that doji bar. I don’t really want to increase or max out my risk on a possible intraday bet by waiting until it clears the next upper level. That’s usually where you’ll expect to witness the fake out or minor pullback that they’ve spoken of a few times throughout their material.
Tess & their colleagues have advised that whenever these types of scenario are setting up, try & get in on the [B]approach[/B] to a potential breakout level & nab the keener risk, rather than exposing yourself to excessive risk at levels where everyone else is looking to enter.
I’m fine with the risk element because it doesn’t cost me much to test the failed lower high/lower low move through 4070 the previous day, & the upside daily range potential on Tuesday is very acceptable because I’m entering with virtually maximum available upside. There has to be a trade off, & mine is the willingness to accept the overnight pullback might not work out.
However, my prior testing & demoing suggests this type of approach is an overall positive one.
I suppose how you play your entries & exits based on this structure will be greatly influenced by your risk attitude, your view of the current technical picture & your prior demo testing results recorded & analysed in these types of situations.
But your no-mans land is another mans playing field. That’s the beauty of the market, some people see opportunity where others see danger & vice versa.
You have to obey & stay loyal to your individual boundaries & parameters until they begin showing evidence of fatigue.
Everyone will take a set of tools, a structure & framework & adapt it to suit their own style, risk attitude & trading objectives. Experience will also play a major part in influencing someones activity out there.
Kyle’s taste buds might be too spicy for yours & yours might be too hot for the next person. It’s what keeps the cogs oiled & the wheels spinning.
Indeed it did Matt.
Double whammy today huh? Sour pmi data that poured cold water over the mornings climb, followed by Junckers Greek comments. Market didn’t like at all did it.
Not sure about the hourly bias though. It’s now compromized 1 prior higher low leg on that timeframe & is pressuring the 2nd @ the 1.4140 level, which happens to be today’s average range limit off the mornings highs.
Obviously it remains to be seen how it adjusts to the mornings events & where it’s likely to meet demand as it trips these trailing long stops.
And there’s the answer, yesterdays lows & todays average range extreme.
So that clown Juncker starts flapping his jaws to anyone within earshot, only to then receive a stern phone call & begins aggressively backtracking.
Those EU officials really are a complete f*cking joke aren’t they LOL.
lots of mention yestarday and today also of the EFSF. are they a Central Bank office Carll or Kevan?
it was being reported this morning of the very importent conclusons of thier meeting for greek support that wuold probebly cause a reacton in the market.
They’re the European Financial Stability Facility hawkmoon.
They’re a luxembourg based mob set up by the EC last year to oversee & administer financial support along with the European Investment Bank to euro member states in times of trouble.
Basically they’re a modern day Lone Ranger or Superman who come swooping in to broker a deal in order to save a country like Greece, Portugal or Eire from going belly up.
Yet another faceless tier of eurozone beurocrats whose fingers are knuckle deep in the honey pot.
They have a similar effect to the [I]Man from Del Monte[/I]…trade desks wait with baited breath for them to say [B]YES![/B] & then they manically knee-jerk bet the euro up through the roof!
If you can devote the necessary time to observe & operate that specific combination then there’s no reason why it shouldn’t be [B]your[/B] working strategy.
You have to appreciate that type of momentum strategy utilizing a 1hr + 5min combo might soak up quite a bit of your time if the market is busy & moving under heavy or aggressive influence.
For instance, you might get a signal to enter during the early european window on a Tuesday, but not receive another decent set up until perhaps 10.30 or maybe 11.00am on the Thursday. So as long as you’re flexible with your time availability then it shouldn’t really be a problem providing you don’t get lured into over trading.
If it stretches your time availability then you might need to accommodate other combinations such as; 4hr + 30min or 8hr + 30 or 60min etc.
The principle is the same whatever the combination, but it’s crucial it matches your style, risk attitude & time availability.
I dont think there’s anything wrong with the technical side of your MO but you should choose the playground more carefully.
The EURUSD has been trading from headline to headline this week wich shows that there isn’t any confidence behind either of these currencies. Those impressive moves are only due to the high participation in this pair but it’s unstable if you’re approaching it from a medium term perspective. There are many other currencies now with much stronger bias and safer play for this kind of trading.
The beauty of that style is, you can quickly scan a selection of pairs or instruments (providing the daily range is acceptable for your objective) & focus in on those displaying strong potential. Then whittle them down to 2 or 3 likely candidates & leg into the one offering the higher potential odds.
That of course goes for medium term opportunities as well as the shorter, intraday ones.
I agree. I’m currently monitoring 7 pairs which I’ve assembled based on a league of average daily range coverage. I’ve tried to mix it up a bit so it’s not too heavily biased in favour of one specific currency, but the superior average range requirements & normal trade volumes/liquidity will have an influence to some degree.
This morning eur/chf displayed clearer potential across the pack. It was either that or the gbp/chf, so equal measure really.
I messed the exit up a bit this morning to be honest, but that will happen. I’m more than happy with the ease of the analysis in arriving at trade decisions. The rest will come with familiarity & experience.
