They won’t rule against it. The constitutional court has gone so far as saying they can’t block these questions of economics. What they can and most likely will do is put in place conditions which require more parliamentary involvement before funds can be committed to future bail outs. This could have significant effects down the road if economic conditions further deteriorate. An immediate block is highly unlikely as the judges will not want to be responsible for the carnage that would result.
Thanks Sean, I appreciate your reply. Obviously they factored & priced in that positive reaction from the ruling, so it’s as it was.
I’ve been zoning in on the Aussie lately & grading my trades via the daily set up I refer to in line with how that currency is setting up across a selection of pairs.
AUD/CAD is still a favourite on pullbacks, as is AUD/USD. Recent data hasn’t done it any harm & it certainly beats fighting the gale force winds blowing through the european currencies lately.
If you’re happy & comfortable with observing that moving average/stochastic combo then stick with it. You could do a whole lot worse than rely on something like that (on the larger timeframes) to guide you through the maze believe you me.
Do you run the rule over the weekly or monthly charts when you’re doing your homework ahead of a fresh week?
Those big psychological bars that Jos advised you to pay serious attention to on the daily & hourly frames recently, also offer up very clear statements of intent when they play out on the weekly & monthly charts too.
If you haven’t already done so just check out those last two dragonfly dojis on that aud/cad weekly chart. Weeks ending 11 March & 5 August on that pair + the hammer on aus/usd from last week reveal strong behavior traits & positional clues that you can take down onto your Daily/Hourly charts as added confirmation that your bias & directional view is being supported from a technical angle.
Just match that up with a fundamental view to offer you more confidence about either placing a fresh bet or adding powder to a core stake.
If your moving average & stochastic readings on your Daily are continuing to confirm a bullish stance on the back of a pullback & you get a powerful weekly or monthly signal like a dragonfly (or similar doji), a spinning top, inside bar or well formed hammer in an uptrend, then you need to be paying very close attention to your hourly trigger points.
Those types of bars don’t play out too often on those frames, but when they do they can offer you some very solid lower risk, higher probability opportunities!
If you’re managing a couple handfuls of pairs then it won’t take you longer than a couple minutes each weekend to flip through those big timeframes & identify the psychological bars at levels of potential significance.
Well I’ll be honest & admit I haven’t, no. But I think you can guess what I’ll be adding to my analysis check list as of this weekend.
Virtually every time I visit this thread & read the stuff you people post I don’t fail to pick up something that adds benefit to what I’m doing. There are no flies on you lot are there 
Thanks again for your time this morning.
Hello all
I have been following this thread for some time with great interest and I was hoping for some insight from others with some experience.
Using USDCAD as an example, I was looking for a continuation long bet on 29/09 after the pullback from the pre-week highs. My objective is to get a seat at the table ahead of a possible breakout of the pre-week high and initially targeting 1.050 area. As price pulls back on 29/09 I’m looking to buy this dip. I see the next support as Tuesday’s swing high of 1.0280. Below this is the consolidation ledge high at 1.0259 (where demand happened to come in). below this one would imagine stops would be congregating around the 1.0200 area. The difficulty lies in where to 1) place the continuation long, and 2) where to place the stop?
I see demand possibly resuming anywhere within the 1.0280 - 1.0200 zone and therefore stop placement could be justified below 1.0200 regardless of entry within this band. Alternatively, I can look for a trigger around these aforementioned levels (Eg 1-2-3/momentum break/stoch hook) with a fairly tight stop and if the level doesn’t hold and I’m stopped out then wait for another setup on the next support level? I’m aware there is no perfect solution and as with everything in this game, compromise is a part of it. Nonetheless, it would be very helpful to see how others may view these kinds of set-ups with the view of achieving premium entries.
On a side note I would like to thank Tess and her colleagues. The time and effort taken to develop and maintain these threads is greatly appreciated, as is the contributions from those who have adopted the methodologies presented here.
Steve
Hi Steve,
Just my view for what it’s worth but that pullback scenario you’ve described is a very typical set up which ticks all the boxes for that type of momentum trade.
With the early week dips clearly being supported, minus any noticeable downside pressure into Wednesday & early Thursday’s trading, the continued bullish momentum offers an hourly & 15 min hook up through the 1.03 round number during Thursday’s New York open.
Common technical template signs being:
Dominant bias
Favourite level to engage (round number or big figure, peak-trough step, reaction from previous day high or low, time of day etc)
Clear trigger set up (candle pattern typically 1-2-3/ib/, hook)
If the entry looks ok but the stop loss required to protect it is an unusually large one then I’ve been taking their advise in the threads of either scaling back on my size to remain loyal to my risk percentage or dropping down to a smaller timeframe to see if I can spot a more technically advantageous spot to get onboard.
The larger timeframe bias is always the primary consideration, so if that is telling me to only look for longs then all I have to do is pick the most logical spot to get in that offers me an identifibale risk placement, & that will be identified either by the hook combination or a price action/level combination (or even better – a combination of both sets of criteria!)
If I was seeking an entry into this pair next week at current levels, then I’d be waiting to identify exactly the same technical behaviour – a pullback that corresponds with those aforementioned technical signals & confirmation that risk aversion is still in evidence, + any supporting data is positive for the US Dollar.
I don’t think these guys are around at weekends so you’ll have to wait for the new week to kick off before one of them addresses your post.
Hi Strobe
Thank you. I have enjoyed your input on this thread. My directional bias is set by fundamental drivers and I use price action behavior from the 60 min chart to confirm this. I have observed the 60 min stoch hook and it certainly works very well when turning off S/R levels. As I feel comfortable with my directional bias and S/R level identification I don’t personally use it as a confirmatory indicator.
Absolutely - as this is fully within my control, money management is the most important aspect of my model and I will always scale size based on my stop requirements.
As I am comfortable with my macro structure, my concentration now falls on identifying premium entries and stop placement. I use Carll’s 5 min stoch hook off s/r levels and this works very well. Especially when the 5 min chart shows trending behavior in the same direction as my template as this allows stop placement below the previous 5 min swing level (ie- 5 min showing HH, HL behavior/60 min showing HH HL behavior). When looking to trigger off deeper pullbacks as in this example, the 5 min chart will obviously be trending in the opposite direction to my template (i.e view 5 min LL, LH behavior against a HH HL 60m template). It is in these circumstances that I find entries and stop placement difficult to gauge.
No doubt I’m sure those within their London office are enjoying our unusual and much welcome perfect weather!
Steve
Don’t forget to add divergences to that list strobe & observe the behavior as & when it plays out at levels & zones of significance.
It will help to strengthen & add confidence to your smaller timeframe entry considerations too Steve.
There were two hourly bullish stochastic divergences last week on that pair, but the significant one appeared at the area strobe mentioned during Thursday’s NY open.
That one helped add substance to Tuesday’s & Wednesday’s higher low pullback & offered the higher probablity entry in my book.
You’re not going to get perfect solutions in trading. You’re also going to experience lots of frustrating occasions when you miss opportunities for one reason or another & get knocked out of trades through bad timing or unique circumstances that impact on what appears to be excellent triggers.
But consistently repetitive, higher probability situations do play out most every week & common observations such as those presented throughout the 3 threads come together quite often to offer up decent odds bets.
A clear bias or directional momentum move (bullish USD/CAD)…
…matched up with a common reaction level (round number that also bounces a prior days high)…
…that plays out inside a timezone that normally provides decent liquidity (european/ny overlap)…
& adds in a reliable price action confirmer (bullish indicator divergence) on a sensible timeframe (60min)…adds up to a pretty confident selection of high probability confluence information…
That same consistently repetitive collection of technical tools also appeared again last week on the bearish continuation moves of eur/usd & aud/usd.
Don’t you have some sort of limit breaker in the event of attempting to trade a strong momentum move against your identified flow reading?
Doesn’t 3 hits in quick succession like that seem a little strange trading this type of momentum trigger?
Stop outs happen, they’re part of the deal unfortunately.
Risk appetite changes, data or price influences affect traders views & biases etc. We’re currently living & trading in exceptionally volatile conditions so we’re going to have to get used to this type of scenario playing out until the market risk settles down again.
I’d imagine the profits on last weeks shorts more than made up for yesterday’s hiccup though huh?
That’s a fair point regarding the multi strike outs. That’s not a normal situation with this type of price momentum set up Matt.
Obviously timing issues will occasionally impact your entries, but getting whacked twice in such a short period of time like that should raise an alarm bell. At that stage you’d be well advised to check for some sort of secondary confirmation of what’s going on out there.
If you weren’t already carefully monitoring your live data/news feed, then you really should have that on tap to see what’s influencing or driving the price action. If you can’t get a clear read on it after you’ve been kicked out twice, then stand aside & let it play out.
The risk switch is being flicked from on to off in a heartbeat at the moment & dealers are reacting to the slightest knee-jerk out there with all the debt concerns, bailout deals & banking issues on the front burner.
Don’t know about you but I would feel even more exposed trading an exclusive technical view in these current market conditions.
As the guys have said, it would be prudent to introduce some kind of circuit breaker Matt whereby if you’re either stopped out twice in a session, during the same day or on & around a specific level/zone, you stand aside & take stock of the situation.
Do a little more investigating & try identify why the set up isn’t playing ball rather than throwing money at it.
The type of behavior on those timeframes is synonymous with changes in bias & risk appetite. You’ll certainly experience whiplash like that when directional momentum runs out of steam & fails to print fresh highs or lows on that primary timeframe.
Unfortunately there’s no crystal ball to warn of that occurance. The only cushion & buffer is your stop-loss order.
That very scenario is currently playing out on eur/usd, gbp/usd & aud/usd. All 3 have been throwing up dip buying opportunities of late (according to this momentum set up anyhow) until late yesterday/early today. They’re now struggling to maintain their prior positive upside & look like printing lower tops on the 60 minute view.
1.37 is a key closing level on this euro upleg, the 1.5675 zone on cable & 1.0100 on the aussie. They all represent a confirmation of exhaustive lower top activity if they blow up around those levels.
Whether that signals a more concerted move to the downside or simply a range & consolidatory phase before a resumption of the bullish move remains to be seen. But you can play it either way by using your dual primary/secondary set up trigger & ensuring you apportion acceptable risk protection to test for an each-way pop.
Controlled flexibility is one of the main benefits of this type of discretionary model.
Hi on the bid,
I’m assuming that in addition to the point you raised above, further technical relevance would be the fact it’s also acted as resistance twice recently on the way up & support twice - so far - on moves back from the current months high?
Considering yesterday’s move down breached the previous higher low at 1.3685 set last Thursday (13th) & found further buy orders at the 1.3650 level, would that now have cleared out the trailing profit stops from the up move & replaced that level as a key sell stop area on any move back down?
Or are those observations too simplistic to hold.
No. In fact they’re completelylogical.
Maintaining that sort of thought process will only add benefit to your technical observations, especially when viewing charts where the peak/trough steps can be clearly seen.
It would yes.
It wouldn’t have cleared them all out, but a good percentage will have taken a hit.
A lot of the more active market participants are currently focusing on, & are more concerned with micro factors that are impacting the pricing structure on very short (1 to 3 day) field of vision than the wider macro events.
That’s not to say the bigger picture concerns are off the radar completely, just shoved to one side until each sessions priorities get shuffled & sorted. There’s a lot going on out there for the market to digest at the moment, hence the intense volatility.
By no means is it impossible to trade or profit from, you just got to re-scale your objectives to match the conditions. It’s like DoubleEcho says, the risk switch is being flicked on & off virtually session-by-session. Asia flicks it on, Europe hits it off, North America flicks it back on again.
It’s a pain in the ass, but you just got to roll with it.
Your 3640 area will now begin to attract sell stops yeah. The weight of them, & counter bids will depend on the progress (or lack thereof) to 1.39 & the influencing factors coming into play over the next few regional sessions.
Doesn’t seem very likely huh…
They did indeed prove to be key closing (& trading) levels. Nice one!
The week is certainly ending the more likelier to reflect the latter of your 2 options than the former.
I like how these solid s&r levels consistently add substance to the current dominant bias, especially when additional aids such as divergences (cheers Carll for the sporadic reminders) are brought into play to assist with adding muscle to potential opportunities. It’s one aspect of this structure I’ve been spending a lot of research time on & am pleased to say, is reaping rewards.
Although I wasn’t around to take yesterday’s New York lunchtime 60 min bullish divergence, it was nonetheless a picture perfect 15m (& 5m) doji inside bar hook. Virtually a mirror of tuesday’s divergence play on & around the same time.
The level/bias/avg range & trigger set-up is a sweet combo in it’s own right, but add in the divergences that often appear on & around these price action plays & it injects quite a punch to proceedings. This mornings bullish 5&15m hook off the round number barely warrants more than an casual, obvious acknowledgement.
Well the bids are/were self evident. Buying the dips (intraday) & adding to core longs as per the recent directional bias has been the higher odds bet & will still focus 3640 as the obvious profit stop & sell stop area on any aggressive move back off current highs. But would intraday stops & those still long from last week not now drag their profit up underneath todays lows into the New York close ahead of any sharp reaction to eurozone officials weekend chatter, given the jittery nerves of late?
I’m sure you’re going to refer me back to your earlier reply to this observation, but I’m very curious to know whether (or if) your view has altered on this scenario as we slide into end of week closure.
No, but I am going to repeat a familiar word you’ll recognize from the posts on here - objectives!
Larger funded accounts tracking the bullish price action from beginning of month & adding to core longs on pullbacks or failure to break down through fair value levels such as the current 1.37 figure, are unlikely to be trading purely naked spot positions. They’ll be diversified both defensively & speculatively.
Options, futures (currency & equity), commodity bets, bonds & cash will feature heavily in their day-to-day business activity so they’re able to achieve a more evenly spread risk effect, a knock-on benefit being minimal exposure to one specific asset class which in turn assists in offsetting any negative affect of increased (& prolonged) market volatility.
It also offers them the opportunity & flexibility to engage in dual or combination jobbing type strategies where they make short visits to the market dipping in & out of defined ranges or extended pullbacks, whilst allowing their core trend positions to tick over until a confirmed change in bias eventually prompts them to fully encash their trades.
From the smaller account perspective however, keeping (& thinking) it simple is always the smarter route, & if you’ve run an intraday long off the 1.37 fulcrum you’ll either have locked your stop back under the 650 bids & trailed it up during the NY shift, reasonably safe in the knowledge that even if it were to travel 70% of the current intraday range, which it does more than 80% of the time (& dependant on the entry level), it would offer you minimum bet odds of 2 to 2.5:1
Alternatively if you’re track & trailing a core long via the stop loss angle, then you’ve already encashed some more of your stake this week & added back all or part of that stake on any of these moves back to support during the weeks action.
Your primary stop will still be underneath the 650 bids because we’re yet to penetrate & consolidate this upside resistance zone beyond 1.39 & until the bullish momentum puts that level in the rear view mirror it’s suspect & exposed to any negative shift in risk appetite.
The discretionary type material has been presented purposefully to focus attention on the technical aspects that have proven to offer positive returns when adopting a minimalist approach.
As with the management of bets, you’ll find that as long as you can lock a robust workable framework & structure into place that marries up your preferred style & risk attitude, the more likely you are to quickly generate the necessary confidence to consistently put it into action without fretting whether you’ve covered all the necessary bases of a more complex set up.
Is there something I am missing from the very first thread “Alternative Technical Templates”. I tried starting on this thread to learn what is going on but it seems like from the very first post I am missing the trading plan or system? This is a quote from the very first post…
Thread started to post up & discuss set-ups & technical behaviour outside of the main “system” theads.
I guess what I am looking for is what is the main “system” threads they are talking about.
If someone can help point me in the correct direction it would be much appreciated. I started on the first thread by tess but am lost on what they are talking about.
Thanks,
It’s not really about a system as such but more about a way of approaching the markets. You will not find any post containing a set of rules and a system to go with them or something like that. But that being said, you will find some of the best information on how to trade in these threads.
That initial thread is an intro to the support & resistance framework that forms the basis or structure of the directional momentum model highlighted in the next two threads.
As the previous poster say’s, there is no system. It’s a discretionary strategy with a heavy emphasis on using support & resistance as the central core from which to construct a directional momentum model.
That thread gives an insight or outline of that core structure, including typical examples of the consistency to which they’re incorporated into a workable strategy.
The other 2 threads follow on from that framework & add a little more meat to those bones by offering a small selection of equally effective technical information to begin putting together a model based on the readers individual style, risk attitude & trading objectives.
It’s a flexible template with a core structure that you can take & mold to your own circumstances & preferences.
Ok it just kind of threw me off track when they just jumped in and started talking about trading. I was lost thinking they were trading a system they talked about.