Technical Templates Continued

[hawkmoon]

Tecnically that is a sound trade matt. All you need now is for todays fundamental focuses of Italian & Greek govn’t fiasco’s to help the eur/usd on it’s way.

it is proving stuborn, aided by strength v/s the pound, trading near to the days highs.
today is holiday in North America & France has also a holiday which appears to be afecting the liquidity so far. Prices have covered barely 30% of the range so far during the european session & is probably confirming this anxious Italian/Greek aspect into the end of the week trading.

Good luck & i hope it comes good for you.

[waytogo]

Hi Matt

It’s a US/Canadian/French bank holiday today & my experience is that the afternoons can be very quiet when that is the case. It has been going sideways for a few hours already, so I am thinking it is time to call the week done & see what Monday brings. Good luck with it anyways.

Liz

[waytogo]

You beat me to it Hawkmoon - and put it a lot better too!

[carll]

@MattW2009

This one caught my eye today.
Comments welcome

Looks like it’s timed out for today Matt.

As hawkmoon mentioned, the focus is on the Italian vote & Greek handover. Barring any last minute hitches, the transitions will viewed very positively & no doubt reflected in the (short-term) price action.

You’ve also got this clump of prior support turned resistance up around the 3650-3700 which repelled the action yesterday & is helping to cap the upside so far today, but I’m not so sure it’s going add any muscle today with the reduced thin liquidity & obvious lack of selling pressure. Appears as though it’s more intent on sniffing out trailing short stops to me rather than mount a concerted effort to drive prices back towards the weeks lows.

[strobe]

What’s your primary or default timeframe Matt?
I take what they advised regarding using the primary (in my case the 240 and/or 60 minute charts) timeframe as the base for identifying & plotting the current bias. It’s also where I mark up my immediate upper & lower support & resistance zones, the prior weekly high-low & prior day vertical seperator.

Once I got a read on the bias I only really observe the sub hourly charts (5 & 15 minute) for hook set ups at extremes, either selling rallies or buying dips providing the average daily range & risk allocation supports it.

I haven’t really experienced a noticeable lack of decent opportunities of late, but I would imagine it would depend on your primary/default timeframe & what you consider is a tradeable trend/bias.

[hawkmoon]

What pairs are folks focusing on at the moment?

this week, from the inta-day view shorts in either eur-usd, gbp-usd or aus-usd, whicever one is showing clearer of signal.
last month was same, just in reverse.

volatility conditons have incresed very much matt, so i am only focusing from inta-day view. if the set up isn’t clear with good average range still intact, then i am passing it & waiting. i added the 3 ducks moveing average on my 4 & 1 hourlie charts from a post i read of kyle morgans & if you are strugling to identify a shorter horizon view, you can do worse than use that as a helping hand.

[strobe]

So are you looking just to take extreme hooks or do they have to also appear in the zones you’ve marked up from the 1hour?

They don’t have to appear within the support or resitance zones I’ve marked out no. They’re identified as areas to be aware of & pay attention to, & if prices set up on the approach to those zones they’ll certainly add weight to an entry, providing of course the entry corresponds to the current bias.

But it’s the bias that takes priority, especially when preparing opportunities from an intraday perspective. If it hooks on & around the european open in line with the current bias & the risk is acceptable with good average range clearance, I’ll take it.

My demo testing confirmed that approach was good enough. Carll’s, jjay’s & Tess’ input also confirmed it was good enough & my results so far have supported both findings.

[strobe]

Or are you using those lines of support and resistance and places to be aware that price may reverse and therefore you’re observing them from a trade management perspective to scale in and out of existing positions?

That’s the context in which they’ve presented it Matt & is exactly how I view zones of support & resistance.
By no means are they set in stone, they’re simply areas that have proven to act consistently in either slowing or capping the price action sufficiently to encourage the trader to consider their options & update their views.

Obviously s&r forms an integral part of the approach they’ve documented on here & all I’ve done (as have the others who contribute to the thread) is take that core principle, add in the accompanying tools such as adr, bias & set up/trade management advice & slot it together to suit my personal risk profile.

The reason I like this concept so much is the fact it’s very simple to construct, apply & manage.
There’s not a lot that can go wrong as long you adhere to sensible risk controls & don’t deviate from those essential 4 elements

[DoubleEcho]

With the wisdom of “stick to trending markets” and “if you can’t read a market, skip it” I’m wondering if my definition of trending market needs refinement

i.e. Are you only engaging at those zones, or are you taking hooks at other locations but using the zones as part of your target and management strategy?

As is always the case, the only thing that will separate each person trading this framework & structure Matt will be the risk attitude & trading objectives. Some will naturally be more aggressive in their risk, trigger & bet management than others.

But basically once you’ve identified & plotted your immediate upper & lower support/resistance zones (including prior day & the prior week high-low levels) there are only 2 key criteria that need to be referenced before an entry is considered:

1. your definition of the current bias or trend based on your primary timeframe.
2. how far it’s travelled (intraday or intraweek) v/s its normal range journey & how much potential you feel is left for profit v/s the risk required to execute the bet.

Once you’ve covered those 2 elements you’re ready to bring your set-up/trigger into play & get your bet away.

The outcome will be directly influenced by your timing at entry & the specific trade management criteria apportioned to that particular bet.
Rinse & repeat.

[xerb]

I’ve decided to go live with the strategy this week. The structure is very easy to set up & the most attractive feature being it follows & conforms to a logical sequence of technical events.
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

3] Use the average day & week range percentages to assist with bet management including entry, target planning & risk.

Hello people,
Thanks for a great collection of information. I especially like that 3 step process as it can be applied to whatever combination of timeframes you wish.
I’m quite familiar with support & resistance concepts, but I do have a question for kyle if he’s around?

Have you had to revise any of your set ups or triggers since you began live trading this method at the beginning of summer? I’m wondering if the increase in volatility & erratic price action has affected the number of opportunities or skewed your results at all.

Also, do you or any of the other guys revise the configuration of the average daily range to account for any noticeable contraction or expansion in price action when entering & closing out day trades.

[kyle_morgan]

Have you had to revise any of your set ups or triggers since you began live trading this method at the beginning of summer?

No. It’s a very flexible template.

You said it - you can play it across multiple timeframe & time horizon combinations dependent on your style, preference, trade objectives & market momentum behaviour.

What started out initially as a day trade can & will morph into a longer duration bet mainly because entries all sprout from a common structure (higher timeframe bias = lower timeframe trigger). If the volatility, momentum & market influencing factors marry up & extend prices well beyond their normal average daily range boundaries, that fortunate event will automatically offer you another trade management option, sometimes resulting in an unexpected yet impressive continuation move that you can roll over into several trading sessions.

The opposite is true of course for a contraction in momentum. You’ll experience plenty of occasions where the best laid plans simply wash out & evaporate when conditions & contradictory market influences render the price action impotent.
Price will barely drag itself up to even the 70% minimum cut off zone. If you manage to cover the spread & pay your commission fee during those frustrating events you’ll be dancing a jig.

Such is life.

I’m wondering if the increase in volatility & erratic price action has affected the number of opportunities or skewed your results at all.

Like I said above, the only thing that’s been affected on occasion is the propensity for price to cover the day’s range when it goes on a directional momentum jog.

Obviously when conflicting conditions are heightened, prices will become mired in sticky or choppy ranges & that will weigh on the ability for price to trade off the upper & lower range limits.

But if you’ve read the material - on this thread anyway - you’ll have come across the few references to marking off the 70% level. Carll computed the stats highlighting the percentage of times price covered ground up to that price zone & providing it doesn’t cost you too much in risk to place your trade, & you don’t get stopped out beforehand, the odds of reaching it are consistently high.

Also, do you or any of the other guys revise the configuration of the average daily range to account for any noticeable contraction or expansion in price action when entering & closing out day trades.

I certainly don’t. I doubt the others do either if I’ve read their comments correctly.

It’s maintained at a constant 3 month average (apparently another stat they’ve computed to maximum effect). The expansion/contraction periods get ironed out over a rolling period.
It’s only a gauge or guide to potential anyway. They’ve mentioned not to stress over it & I’ve personally found that to be the case.

Providing you’re facing the right way when you enter your bets by referencing the higher (primary) timeframe first before pulling the trigger off your lower (secondary) timeframe charts, then you’re stacking the odds as much in your favour as you can. And that’s all any of us can hope to achieve on a regular enough basis.

[xerb]

mainly because entries all sprout from a common structure (higher timeframe bias = lower timeframe trigger).

In other words bullish trend on Daily, 4H or 1H primary chart equals trading only long breakout & pullback continuation set ups on 30, 15, 5 minute secondary charts, which of course is your classic top down approach.

The part that I like is how they don’t place restraints on the smaller timeframes. They’re simply a means to an end & each one can overlap. You read a lot of disjointed comments on trading boards where people slot smaller timeframes such as 5 or 15 minute charts into the tight stop loss, small target, multiple entry box. You don’t often read about the more inventive ways these timeframes can be used to enhance a strategy, but that message comes across very loud on this thread.
Nothing wrong of course about using them to obtain fast profits when circumstances allow, but they offer so much more variety if you don’t restrict their usage or job definition.

that fortunate event will automatically offer you another trade management option, sometimes resulting in an unexpected yet impressive continuation move that you can roll over into several trading sessions.

I realise that since the summer there might not yet be a typical pattern from which to draw solid conclusions, but is there already one particular management option you’re favouring over another when an entry rolls over into the next session? and if you enter off a specific lower timeframe would you or do you then primarily manage the trailing stop loss from the swings on that timeframe?

The advantages of incorporating the average daily range into the pre-trade & entry analysis is obvious, just wondering if you’re finding an equal benefit when using it to assist with trailing stops.

[kyle_morgan]

is there already one particular management option you’re favouring over another when an entry rolls over into the next session?

Not really. I run most of my trailing stops behind logical technical levels.
With it being a discretionary model each session will be governed by whatever the market is focusing on at the time & that is reflected in the behaviour of the price action.

When it’s heavily directional & keying off solid technical levels, trailing up or down behind pullback swing zones is a very rewarding exercise, especially on the cross pairs.

When the conditions become chaotic & nervy, the spikey erratic intraday swings send that strategy head long into the ditch, therefore priorities & objectives are constantly in focus. But that’s the case for everyone. I know from the material on the thread & the actual experiences of live trading, those scenarios interchange quite frequently so I either adjust to it or step aside.

When the opportunity to run a position presents itself I try to take advantage of it. I’ve been prematurely chucked out of more positions than I’d like so far, but that’s the nature of the game. We all have to continually determine whether the benefit of that next bet justifies the risk we’re prepared to take & once positioned, it will be constantly evaluated as the bet progresses.

If I’m fortunate to get an entry that begins demonstrating good rollover potential & I can identify a level that represents decent value compared to current risk I’ll ensure I give it sufficient room to prove me right. If it does…hurrah. If not, book it & move onto the next bet.

and if you enter off a specific lower timeframe would you or do you then primarily manage the trailing stop loss from the swings on that timeframe?

Not consciously. If I’m trying to get a foothold on a potentially rewarding move & looking to trail my stop then it stands to reason I’m only tracking the price action from the most recent swing or key technical level. That isn’t going to be any further back than a day’s worth of price action & I can view that from any timeframe I choose.
That’s where the adr comes in handy.

Those levels will be a lot clearer on a 5 or 15 minute chart than they will on a 240 or 480 minute. I can view a month’s worth of price data from my 15 minute chart. I already know where my next upper & lower s&r zones are because they’re a work in motion & constantly being updated as the market changes course. They’re plotted & distributed onto all the relevant timeframes anyway, so as they come into view on the smaller timeframes I can prepare to take action…or not.

[catcher]

Also, do you or any of the other guys revise the configuration of the average daily range to account for any noticeable contraction or expansion in price action when entering & closing out day trades.

Same as kyle. It’s kept at a constant. Reason being it’s a large enough sample of time to absorb the odd period of excessive price behavior yet small enough to reflect & aggregate the current ebb & flow of risk appetite.

December, along with the late July–early September period represent two regular occasions in the business cycle where range expansion & contraction will be heightened. December especially is when the institutional sector begins squaring up positions ahead of year end.

Trading volumes & activity dry up quite rapidly & that will often exaggerate the behavior of the price action. This year volumes are already down by approx 30% compared to same period last year as firms close up earlier than normal due in large part to the continuing woes surrounding the intense debt & banking crisis.

That’s not to say you can’t go about your usual business, you just have to take a little more care & keep your wits about you. If technicals are going to go awry it will be during these periods of much lower volume & reduced activty.

[xerb]

Thank you both. Much appreciated.

This year volumes are already down by approx 30% compared to same period last year as firms close up earlier than normal due in large part to the continuing woes surrounding the intense debt & banking crisis.

I can imagine the frustrations being suffered by some of the bigger players attempting to establish a base position on the majors, particularly since the summer. Conditions haven’t exactly been conducive so I suppose you can’t blame them for throwing in the towel early this year.

The objectives you guys talk a lot about on here will certainly have been high on the priority readjustment list lately.
I can see 2012 continuing in the groove that 2011 has chiselled out – fleet of foot, banking profits timely & often!

[xerb]

Long story short, following 2 meetings including verifying & evidencing my live trading history, I spent time at their offices, met a few of their colleagues including the few who post on here, & traded one of their in-house accounts under supervision. I was already basically trading their structure anyway so it wasn’t like it was a new experience for me.

As of beginning of this quarter I now operate via a remote dial-in from my home office & receive weekly security password access to a sub account into the groups trading platform.

I’ve been revisiting the content during the holidays & picked up on this post from 2010. Do you still trade with these guys Carll? and over how long did you need to evidence your live trading history?
I’m assuming their trading platform is direct with one of the major Banks?
Was it a difficult or uncomfortable transition scaling up to their broker platform?

• I’m free to log in & listen to their pre-London bulletins & post London/New York market wraps focused on what & who is currently driving & influencing the spot market activity & how those influences are likely to play out over the next 24+ hours.

There’s also the opportunity of interacting with them via their live trade room which is usually operational from 5.00-6.00am gmt through to the London fixing, sometimes a little earlier and/or later depending on the state of play.

Can anyone interested in their material & thread content access this option?

[catcher]

@xerb

Do you still trade with these guys Carll? and over how long did you need to evidence your live trading history?

He’s no longer posting here xerb & as far as I know has disabled the thread notification.
We started up with them within 3 months of each other but whereas they contacted me, he actually approached & pitched them. Although he had no direct industry experience, he did provide evidence of a solidly impressive retail trading account.

He works an account for Tess & jjay for a good chunk of the year out of UK & does his own thing the rest of the time back in the States.
I mainly job for Jimmy & occasionally for Tess & Jocelyn’s brother.

@xerb

I’m assuming their trading platform is direct with one of the major Banks?

Most of their spot business is routed through Welcome to Newedge FX

@xerb

Was it a difficult or uncomfortable transition scaling up to their broker platform?

No. As with most things it just takes a while to get your bearings. There’s a lot more phone contact which encourages you to nurture a good relationship with your rep.

@xerb

Can anyone interested in their material & thread content access this option?

Active thread contributors used to be able to log in, but it’s now restricted to colleagues, contacts & clients only. It’s a busy working room xerb & isn’t really set up or designed to accommodate a learning/tuition type arrangement.

[xerb]

He’s no longer posting here xerb & as far as I know has disabled the thread notification.

That’s a shame. I wanted to message him & get some feedback on a couple of points he raised in other posts.
Thanks for your reply though catcher, very interesting view & it’s also a shame about the live room access. Still never mind, I’ve got plenty of decent info here to be going on with.

[kyle_morgan]

That’s a shame. I wanted to message him & get some feedback on a couple of points he raised in other posts.

You wouldn’t be able to communicate privately with him here until you’ve shipped 50 posts anyway xerb.

If you take a couple of minutes to sign up here Combination Strategies : Forex trading strategies and systems you can contact him via private message immediately without ever posting a word. He doesn’t frequent it much, but he was active there just before Xmas.

[bhops]

Hey guys,

I first started looking at this thread, the very first original thread way back in the day and it got me started on a much cleaner way of trader. Free of indicators, marking relevant horizontal S&R zones and using them as a template from which to trade from.

The biggest drawback for me is I am in NZ so I have to trade mainly the Daily TF. I say drawback but not too much so as I have still been able to make healthy dough trading mostly this TF.

What I would like to do is return here to the thread where it all started for me and maybe chuck up a chart or 2 and show you how my ‘technical template’ works for someone who mainly has to trade the Dailies, just in case there are others out there who are in the same predicament/time zone as I am.

Hope that will be OK with everyone?