hello strobe.
i know the sorts of price bars that Jocelyn recomended to you to pay attenton to on the daily chart such as dojis, spinning tops & inside bars, but what other sorts of opperunities wuold you consider for takeing each way trades when the moveing average is convergeing with the price & possibly signeling for a change of the bias?
i am in agree that this template is very clear & offering some very good oppertunities.
As these threads are focused on the identification & application of support & resistance, that would be one of my considerations hawkmoon.
EUR/USD has uncovered plenty of offers or shorts up at this 1.45 – 1.4550 level. So as the moving average begins to catch up with & hug the price bars around this zone I would be looking for dojis, spinning tops & small inside range bars/days at extreme stochastic levels on both the daily & hourly charts on the approach to, & exit from that resistance zone.
Pullbacks highlighting extreme stochastic readings on the hourly along with any bullish or bearish divergences would also get my attention. I’ve read where they highly recommend identifying & trading divergences as they form around clear support & resistance zones, particularly at previous day or week high/low levels, providing of course the average daily ranges have acceptable room remaining.
I don’t think I’ll need anymore than that to be honest as this type of scenario will be the exception rather than the rule. There will be plenty of easier opportunities to trade the market in sync with dominant bias & momentum as evidenced by my normal daily chart filters, such as the bullish AUS/USD pair mentioned this week.
i see where you are comeing from, thank you.
and of course the eur-chf & gbp-chf pairs that you mentoned resumed there primary bias by turning off support & resistence levels formed at end of July at those daily spinning top bars influanced by the Swiss officiels coments.
it’s extra nice when fundamentals, price action & levels all line up in order.
Candle stick patterns. Doji, spinning top, hammer, shooting star…etc
I think Jocelyn hinted (another little nugget) a few posts back that hourly and above are the time frames of choice for candle sticks patterns.
Does anyone use candle stick patterns on the sub-hourly time frame or should they be avoided?
i believe you will find the smaller timeframes are only viewed as triggers or to refine entery and maybe obtain keener risk placemant Darren. this is also how i understand Carll also uses them if you are basing the entery from his hook type set ups that he uses on 15 & 5 minut charts.
the individuel candle or bar is not the importent elemant on the smaller timeframes. once that larger timeframe bar is formed, the smaller timeframes can be used as a refining tool to get your entery.
many times you will see the same type of behaviuor (dojis, spinning tops, inside bars, hammers) on 15 minut chart at similar areas as the hourly & daily charts, & particulerly at previus days high & low for instance, & that only adds to the benefit of a possibel entery if it also matches with an extreme hook in line with the primary directional bias of the move.
I interpreted it as more of a higher reliability thing than a choice. Personally I’d pay a bit more attention to a doji or hammer forming on a Daily chart than I would on a 5 or 15 minute chart, especially if it was forming at a level of significance. I’m only taking note of them on the daily and/or 60 minute charts Darren.
My original query to the thread was how could I use that moving average & stochastic set up on my daily chart to gain maximum efficiency from moves based around the structure these guys have presented. Jocelyn kindly advised using a top down/multi timeframe (daily, 60 & perhaps 15 minute timeframes) view + working with those various bars (on the daily and/or 60 minute charts) to focus in on possible opportunities to get in sync with the dominant directional bias.
Personally, I’m only intending to use the sub hourly chart as a timing or risk enhancement option. Therefore I won’t be paying much attention to the type of candle formations on those timeframes. As long as the hook on the daily and/or 60 minute charts are supporting a long or short opportunity then the lower timeframes will be used as an additional bonus to obtain a more beneficial entry and risk placement.
But I suppose if they offer [B]you[/B] an advantage then why not incorporate them alongside the information you extract from the higher timeframes? I suppose it all comes back to what suits each individual in differing circumstances & scenarios.
[U]GBPUSD[/U]
This pair is Currently trading around the 6100 figure.
This is a strong line of support historically.
I think (operative word here) the primary chart (daily) still has a long bias.
I will be looking for a pull back towards the 6080 area or lower on the 1H chart. PDL is 6060.
Inside bar, doji, spinning top or hammer will get me long.
NB:I am not using stochs (hook) at all.
Play it as you see it Darren according to your own views, but I’d rank 1.61 & the next lower zone around 1.60 as the priority levels down here.
That 1.61 level is/was the most recent technical spotlight zone, evidenced by the daily closes off 10 & 11 August & the following bullish appetite for sterling. Personally I’d want to see price being supported back above that level before laying long bets on this pair, but that’s just my view.
Market will now have 1.60 clearly in the sights & if stocks & the general risk aversion don’t quickly turn positive that level will become a very strong magnet.
Similar scenario now playing out on eur/usd with 1.4050-1.41. That zone is the big spotlight for euro with the summer lows at c1.3850 the next magnet.
I note the price action has now compromized the average (to the downside) on both these pairs during the past weeks activity. I’m not suggesting it’s a dealbreaker but it certainly bears out the current picture on both these major european pairs.
In my book that certainly constitutes a nasty rap across the back of the knees with a thick stick. Appears as though the Swiss authorities eventually lost patience with the markets attempts to push their currency to extreme levels.
For the time being that safe haven port-in-a-storm is now well & truly closed off.
I assume you’ll now be looking for some evidence or intent for price to show that it’s finished descending from recent August highs. That would would be higher lows & at least a higher high to show up on the smaller timeframes?
It’s hardly the best kept secret in the markets though is it. They’ve been advertizing it now for a wee while.
If you’re a Swiss exporter the last thing you want is an aggressively strong currency. Those guys carry an awful lot of clout out there & have been hurting for a while now. They’ve also been actively voicing their displeasure at the total lack of action from government & central bank avenues to stem the tide. If (as a gov’t or central bank official) you want an easy life then you don’t ignore the guys who bring prosperity & money into the country!
Yeah, that’s the type of activity I’d want to see as a bare minimum.
Other folks might be different, but I don’t attempt to pick tops or bottoms on any timeframe, or try to front run prices just to get a head start on a move.
I want to see some clear evidence that the market is at least attempting to arrest a strong directional shift. And one of the favorite signs (for me anyway) is the capability to begin building some kind of base.
A higher low & a higher high (in this instance at the very least beyond 1.61 on Cable), would be a minimum consideration for me.
You can begin feeding in a small stake to test the intent & then add in when you receive further confirmation that it’s attracting larger bets. By no means does that route guarantee the downside is done, but it’s a tried & tested method that these guys have advised over the last 4 years & that’s been good enough for me.
nice view & comments again today, thanks Carll. the risk aversion indeed has not improved & price now pressured to the 1.60 support. as with eur-usd 1.4050, this gbp leval below 1.60 brings the summer low at 1.58 into play.
i wonder how hard will the market players test out the SNB determinaton to enforce this 1.20 line in the sand of today? maybe now they focas on new possibel havens such as eur-nok for instance as well as gold. it is interesting week & rest of month for sure 
Very interesting start of the week indeed!
The fading of the euro and the sterling makes sense but it was bizarre to watch the metals go around in circles all day.
The scandinavians got hell of a kick out of the SNB move too which seems pretty desperate to me and also, very strange how much the CAD gained against all the majors.
Looks like we’re in for a busy week.
Unsurprisingly, risk is orchestrating the game play again this week quitter, plus traders are hanging loose ahead of tomorrows BoC statement to see if there’s any change in Carney’s comments re; rates/timing.
It’s a busy data week for Canada too with the Trade, Housing & Jobs numbers flagging up later in the week.
A lot of spec positions being chopped, dealt & re-allocated on the back of the Swiss shake up today.
They’ve seen a 30% pop in their currency from April through August whilst delivering concerns (warnings) to the speculative community about over exuberance of bets on the Swiss. Whether they have the stomach or the wherewithall to finance & sustain large scale visits to the market to carry out their intent remains to be seen, but part of this exercise is designed to instill fear & caution.
It’ll initially dampen the enthusiasm of the more aggressive short term candidates & the rest will see which way the wind blows. No doubt they’ll begin to feed into longs (buy dips) providing these near term resistance levels flip to support, but we’ll just have to see how the land lies I guess.
If this intervention succeeds, then it would be the exception to the rule. Still, so far it does look like they may actually pull it off. It’ll be interesting to follow the development.
The trillion franc question is, what if the German courts rule against German taxpayer euros going into the PIIGS bailouts?
Watershed moment looming.
Thanks carll, that makes sense.
As with the Swiss Franc development, both events will eventually unlock fresh opportunities. These types of market behaviour are a very good measure of ones patience & discipline limits.
Carll, as a matter of interest what is the equivalent rate of 1.20 EURCHF versus the Dollar & Pound. I have those 3 grouped as one unit in my basket & simply trade the one offering the better set up. I’m just interested to know where the line is on those two.
I agree with Master Tang that this court ruling could set off a few fireworks if it doesn’t all pan out smoothly, & surely it would force the Swiss authorities into a bit of a corner if things went belly up after they have publicly declared their intention to buy euros to support 1.20.
I’d love to be a fly on the wall at the SNB if the German courts cause a plummet in euro levels this week.
He’s not around until Friday strobe.
As a reference point:
0.8300 usd/chf
1.3500 gbp/chf
There are always risks involved when attempting to establish a policy. That event is certainly one they will have considered, but to a large extent their hand has been forced & they will actively defend that level, certainly in the interim.
It’s a credibility issue strobe. They can’t be seen to bluff that kind of rhetoric. They’ve also been in talks with other Central Banks & Treasury departments, including the Chinese, to get a taste & feel for the general consensus out there regards this type of financial defense measure. The Japs are next in line for a test of their resolve, so it’s imperative these CB’s know exactly where they stand if they need to call on back up in the short term to reiterate their aggressive stance.
Will it all end in tears? probably, but as you quite rightly pointed out – all this turmoil will open up opportunities for those adequately prepared & willing to take advantage of. Be it in the direct currencies involved, or the ripple effect it has on the generic marketplace.