Technical Templates Continued

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561

Ok, so now that price has edged along a little further over the past couple days, you simply run through the same procedure again, tick boxing the upside & downside zones where the orders are beginning to stack.

Unless & until the price begins displaying clear reversal behavior, then the odds are that it will attract continued sell order flow bias.
Knowing that, you can plot the likely upside zones where the stops (trailing profit, continuation sell & tiered buy orders) will be stacking well ahead of time & then wait for the action to offer you your usual trigger set up signals to take it on (either way).

1.5050 has drawn it in & the big 50 figure waits a spits distance below. That will be a level harbouring Options & large stop activity, attracting heavy traffic. A clear bust there opens up a trip to 48 which I’d imagine will be aggressive & rapid.

Upside steps are pretty obvious & well lit. They’ll be all sorts of candidates looking to get a hold of those levels, particularly (buy orders) bargain hunters seeking rapid breaks up the ladder as they piggy back short covering, whilst trailing stops get fired off.

566

I’m not sure how you plan your trades or what your considerations are when setting up trade opportunities, but that time of the day isn’t a big favorite of mine to be honest.
The types of set ups & triggers one uses could have a dependency on time of day/level/percentage of the usual days range already covered etc. Well mine do anyhow, I don’t know about anyone else.

I’ve found through experience that the optimum set ups I use for fast trips to the market usually present the cleaner & better value opportunities during the early-mid session London action.
That’s not to say I won’t consider trades later into the day, but they would be different strategy plays.
In order to consider taking on an intraday trade, the conditions would have to be pretty impressive to lay that kind of risk at that hour on the clock.

At that point around your yellow box, price had covered, & was retreating from, 70% of it’s normal range coverage. It had also tagged a level I’d flagged up already as a probable support/defense zone where likely 2 way activity was building.

Price rarely shifts through one or more levels of prior support or defensive zones in rapid succession.
What generally happens is a quick move down (or up), to test the strength of the bid (or offer) activity & then an evaluation of the level by scale outs/profit taking/order shuffling etc. That can take a little time to unfold & gather pace.

Around the time of your yellow box highlight the London market was getting ready to close up shop + we were half a click above a very important & busy level (1.50). It would have been surprising (to me anyway) for price to have been herded aggressively below that 1st defensive line without taking stock of events first.

That hour of the business day might attract other players to the market, but I’m usually well home & hosed by then, unless I’m managing positions on a longer range book, but that’s a different ball game.

567

It might be if you got/get a familiar signal to begin preparing for a continuation short entry.

What if price doesn’t get back up there?
What else will you be considering to get you seated short if it fails to agree with your analysis?

Where else will you be considering a short from?
What needs to happen to get your short bias triggered?

570

The only way you’re going to become familiar with how any of those potential triggers play out on & around your favored set up locations (in tandem with specific market environments/behavior types), is to thoroughly test them out.

If I were you I wouldn’t pick too many triggers at the stage you’re at.

Unless you test them out solidly & thoroughly across a range of market behavior styles, you won’t know whether they’re suited to your particular trading style or if they’re actually worth more than a damn in live conditions.

All you really require is one (2 at most) solid trigger(s) to match up with a specific set up at a favored location or zone.
If it’s simple enough & you test it out sufficiently in live conditions, it ought to see you ok on both the short & long side.

Obviously, you got to decide what type of market environment (short range or long range) you’re more suited to, but again that will come from testing & familiarity.
Same as if you have an affinity with a particular currency pair. Some set ups & styles will be more suited to lower or higher volatility instruments.

It’s all mostly a trial & error exercise.
Just don’t try to cover too much ground at once. It’ll merely serve to confuse & frustrate.

A good example of the above would be to take a look at Carll’s posts on here.
He’s managed to test out, establish & manage a style, set up & trigger to work across a specific market environment.

One template, one set up & one set of criteria that he’s becoming very familiar with that sits alongside a repetitive & consistent market style.

If the price action fails to exhibit a definite bias and/or lacks sufficient momentum then it’s left alone.
Only when it sits up & winks does he engage.

He’ll fully admit he’s still only a rookie, but he’s way ahead of the curve as far as establishing a clear agenda & a very minimal, yet effective set of rules to keep him on track.

That’s the kind of gig you want to be aiming for.
Lightweight, easy & efficient to operate.
You should be able to open up your template, get your seat comfy, turn the key & be ready to gun the gears.

Leave the complicated analysis to the geniuses & seminar salesmen.

571

The yellow box wouldn’t have been such a bad entry. It only retraced around 30 pips before heading on down. I’m not too crazy about that time of day either though.

I won’t offer any advice because JJ’s insights are far superior to mine, I just got my intrest piqued cause you guys were talkin about the cable.

574

Traders have different styles & different strategy plays that they grind out & perfect over a period of time.

Some prefer to execute during the high volume periods of a particular shift, because the set-up/trigger combination fits that type of price activity & dovetails with their aims & objectives.

Others will possess certain triggers that they can flick on & off dependant on market conditions. They might have another couple of triggers in their back pocket that they know offers them higher potential odds of a positive outcome at a very specific market turn or event.

What suits one, won’t necessarily suit another.
Although I totally agree with Jay’s comments about the discipline aspects of engineering trades & opportunities to suit a strategy style & execution play, each person has got to explore & filter their own set of preferred circumstances. What you don’t see or appreciate is the fact Jay works to very specific parameters & knows his way around a technical chart blindfold.

To some short-range participants, there has been plenty of opportunity to take Cable on during both major (London & NY) shifts today. To others, the London shift will have legged them in & kept them in all day long.

By all means absorb & digest the helpful information & commentary, but don’t unnecessarily close doors because of someone else’s influence or preference.

It’s your money & your time. Use both assets sensibly & intelligently :wink:

575

Don’t overcomplicate it. If you’re plotting potential support & resistance zones as part of your analysis package then you don’t need any more than a couple of levels north & a couple of levels south of the current price.

Remember, they’re only guides.

You’re looking for, & seeking out area’s where traders have either agreed a fair value trade-off (consolidation), or disagreed on a level where one set of players have very visibly overwhelmed the other set of players.

If you have a clear bias (short or long) & that bias is obeying the peak-trough behavior patterns (signifying buying dips in upshifts or selling pullbacks in downshifts), then until something happens that reverses that behavior pattern, the lowest risk/highest odds ratio is to continue betting with the dominant flow.

In most cases, these clearly identified levels of prior support/resistance will offer up excellent confirmatory opportunities, & they will also assist in determining whether or not a particular level or zone holds interest for your trade objectives & strategy plays.

I’ve pinched one of Sean’s charts from late yesterday to illustrate my point. He was highlighting initial & secondary decision area’s where the higher odds were likely to offer add-ins to existing short positions on the Cable.

Nothing fancy or complicated about the upper levels highlighted.
Clear & easily identifiable zones where traders were likely to re-engage short orders, locking back into the clear downside momentum of the past weeks action.

If not, then that initial level at c4950 would be your 1st alarm bell that demand was beginning to overwhelm supply on this aggressive shift down.

5min chart view

If you then shift it forward to the overnight action you can see that the upper tier held firm obeying the markets peak-trough behavior pattern, & if you’re struggling for where & how to get aboard a move like this, you could do worse than to plot the additional price aids that jj mentioned yesterday re; Carll.

That opportunity offered up 2 bites of a very juicy cherry to lock back into the dominant bias & momentum for a low risk (re) entry.

In order to change tack & begin to consider longs, something has to happen to influence that decision. In other words, price has to begin printing higher highs & lows, (signifying a change in the momentum shift of the traders) whilst breaking & holding previous swing points along the way, at the very least.

That hasn’t happened yet has it?

579

why not just use the higher timeframe support & resistance levels you’ve identified as your focal point, & simply transport them down onto the lower timeframes?

that way, you’ll have a closer view of the zone as it comes into focus on the sub hourly timeframes. You can then maybe obtain a cleaner entry that perhaps offers up a more beneficial risk deployment.

one tip would be to introduce other/alternative potential s&r levels gradually & see whether they offer you any additional benefits.
don’t trade them, just observe their behavior & see if they improve efficiency over & above what you currently use to operate your strategy objectives.

exploration & consideration of any fresh technical tools should be viewed as a helpful & profitable addition to an already successful template.

if it aint broke, it don’t need fixing! :wink:

well, like I said above, if that’s your preference & one of those triggers pops up on your 4 hour or Daily timeframe preference, then use that as your primary confirmation & drop down to a lower timeframe to see if it offers you a more appropriate timing & risk option.

just because you do your preparation on the higher timeframe charts doesn’t mean you can’t execute & manage your position via a smaller timeframe chart.
use the combinations to your benefit, if a benefit actually exists.

questions & comments related to the thread topic aren’t viewed as spam Matt :slight_smile:
post up as many contributions as you want. someone will get to them at some point.

581

Is there such a thing as a safer trade?
As you progress & become ever more familiar with the strengths & weaknesses of your strategies & their relationship with the market environment you choose to interact with, you’ll find that your risk will more than take care of itself.

What I mean is (if) when you really get your model(s) down & tight to the point that ‘identifying/preparing/executing & managing’ your positions becomes a natural function of repetition, you won’t even think twice about where your risk is or where it needs to be.

Your trades (should) will be geared & engineered around similar levels, designed around similar set ups, based on similar research & analysis, & triggered automatically, devoid of emotive influence.

That is of course if you’re intent on developing a discretionary type model.
The rewards are self explanatory.
The efforts involve time, patience & discipline.

582

Hey guys,
Not sure how much intraday stuff you’re doing at the moment, but I assume you’re readjusting your sights on average daily range measures for trade management on your short term visits to the market?
How close are you readjusting, if at all?

Typically, would you simply adjust to take into account recent volatility uptick until prices slot back into a more normal range coverage?
As it’s been a while since the market experienced such a large extension to ranges, I was wondering how much extra flexibility you allow it.

It’s obviously also knocked onto the near term s&r levels & skewed them out slightly, which is to be expected under current conditions. Are you seeking any further confirmation before triggering at all?

Cheers :wink:

583

It’s a cherry picking exercise for me for the time being catcher.
jj is off this pm/tomorrow, but he’s still pretty aggressive & is working off 10 day period range numbers past couple of weeks.
I believe most of them that are dialling in & out of the London shift are working to 5-20 period, depending on the previous days range & the current days flavor/price driver.

Nothing special, no. If you can’t see much of interest on the hourlies, dial out on a 15 or 5m to take in a couple weeks worth of data & see what stands out.
Just mark out the busy levels as per normal.

jj posted up & sent out a Dollar Index chart Sunday with tradeable zones for Monday (re; eur & cable levels), but that’s a normal chart inclusion for him.
I’ll see if I can get the attachment tags & post it here as a point of interest.
But I doubt it’ll tell you anything out of the ordinary to be honest.

You shouldn’t notice much change in the reactions to obvious buy/sell pressure levels, they’ll simply react faster & move further than normal until it all shakes itself out & settles down.

584

I’ve got them here Dan. Jos is away this week, so it’ll be easier if I post them from the original.

Like he said, nothing out of the ordinary. Upper & lower zones marked out & ready on the Index ahead of the weeks action.

His lower marked bid zone at 82-83 comes into focus & providing it lines up with your favorite pair(s) & ties in with any other accompanying analysis, leg in & work your order.

Index 15 & 60min charts. Couple of juicy looking doji’s printing right on that support grid.

EUR & GBP 15min charts signalling the shorts into the Monday morning London action, mirroring the Index support reaction zone.

585

I figured as much, & it makes sense to at least drop down the scale a little whilst all this heightened volatility is still blowing around, but thanks for your confirmation Danny.

I haven’t checked on the $ Index regularly at all lately, preferring simply to flip the EURUSD on it’s head, so that’s a well timed nudge to keep it cooking on the back burner. That example clearly supports the merits of keeping more than a keen eye on those mirror s&r zones.
Very smart.

Thanks for those charts Andre.

Which I guess is the most viable option under the circumstances.
Although the euro braked shy of that upside resistance block Monday morning, the $ Index reaction into that support grid would have eased the decision process somewhat.
Thanks again guys!

586

Absolutely, which is why I was so enthusiastic about reintroducing them back into the set up/trigger model I now use after having the execution rules & knock-on benefits properly explained to me.

You’re right, I probably don’t. But they don’t clutter up the chart, neither do they conflict with the preparation or order placement around my set up preferences. In fact they’re a much bigger help than they are a hindrance, especially when legging in (& apportioning risk) & you don’t hear that too often on these boards!

If you superimpose them onto catchers chart from yesterday, they tagged & confirmed the move away from his upper resistance channel on Monday morning & signalled the exit this morning as price lifted calmly away from his lower 2580-2610 support channel.

But then, I don’t need to inform folks they work best when utilized in tandem with such levels & zones, after all that’s the whole crux of this thread!

I suppose if you were so inclined 2580-2610 might have offered acceptable risk to open a cheeky long order down there this morning given the fact it coincided with a round number that attracted good demand towards the end of last week. :wink:

587

That’s a lot better.
Reverting to the 10 day has brought it nicely into line with the recent volatility & made it easier to manage.
Yesterday, gbp honored the 70% level almost to the pip & it shouldered it again all morning until it continued down & covered the days range into the London close.
:wink:

Looks like it’s making a break for last weeks lows huh!

591

No, not at all. To my mind, I’m not really exchanging or compromizing on anything. It’s simply the preferred working template that dictates when & where on the technical chart I place my bets.

The preparation, bias, momentum & vicinity of the price action (triggering into lower lows & highs/higher highs & lows etc) are all derived from the (minimum) 60 minute view.

As I’ve been constantly reminded, at the end of the day it all comes down to timing anyway.
Regardless of the chart timeframe, the trade would get stopped if that part of the equation is consistently out of whack.

The more you work a particular angle the better you become at spotting the typical behavior signals.
I’ll receive visibly higher (potential) negative outcomes when the moving average on the 5 minute (or hourly – they’re simply a mirror of each other) begins to flatten out, highlighting a potential swing & change in the bias.

I’ve quickly learnt to become more wary & suspicious of signals when those conditions begin surfacing.
Just like this morning in fact on my favored pairings!

I might occasionally miss out on a trade if it’s just an odd aberration, but there are plenty more occasions where it’s prevented me from taking on multi stop-outs until the bias has straightened itself out again.

It’s all a trade-off between risk & opportunity!

594

If you operate a strategy or take a market view where your trigger and/or set up is primed via a sub hourly stance, you expose yourself to the fact you might get unseated a couple times before (or if) the momentum takes you along into profit. And that exposure will be directly determined by your rules of engagement.

There are risks inherent with both views. You won’t get a perfect compromize.
There will be occasions where your shorter timeframe exposure will mitigate your risk & return many times your initial entry costs, & others where taking the slightly longer view will keep you aboard a move that would otherwise have unseated you prematurely and/or incurred additional costs to get back aboard the move.

There will also be times where you achieve pretty much the same kind of return trading & managing a position via a 5 minute view as you would operating the very same trade via a 60 minute angle, particularly if the move is rapid & aggressive (thus greatly reducing your intial risk/costs)

Swings & roundabouts.
Eventually, it comes down to a trade off.

The important thing is to recognize the benefits & restrictions of the trade off & ensure the strategy(ies) you operate fit comfortably with your aims & objectives.

Too many folks waste an awful lot of precious time & energy attempting to get the best of both worlds in one easy fit.
If only…

596

Why not? :slight_smile:
It’s all about process of elimination.
Trial & error, just like any other model construction on any other timeframe template, which I guess is why god invented simulators.

If you have the available time to devote to that type of timeframe work ethic.
That’s definitely going to be your most important consideration for sure.

Then as long as you’ve adequately tested your set up & triggers to ensure they stand up to that type of fast(er) momentum & volatility inspection, the only way you’re going to find out what type of market rhythm suits your psychological, as well as your strategy/model tolerance, is to roll your sleeves up & investigate.

You’ll know fast enough whether a certain style fits better than another.
If that type of timeframe operation suits your head & your nerve, but your model is suspect, then you need to build & test something that suits the timeframe exposure.

599

Only thing is though, it doesn’t have far to go before it gets into that consolidation area centered around 1.445 ?
may meet some resistance around 1.440 ?
We should have got that 100 pip climb from that bottom up to where it is now. I missed it though.

603

You could be right.
Personally I’d be happier to see a move up through & test of the current weeks high at 1.4520 before placing any long bets, but to each their own. I guess if you receive a green light to get long, then so be it.

It’s very scrappy & bitty this week beneath 4520 on my (60 min) main template chart, & I’m continuing to see it holding a bearish bias until that aforementioned level is cleared.

I placed my 1st bet of the week this morning as per my set up, shorting eur/usd as it pulled back from busting the current weeks lows, but got stopped out an hour later.
It would have taken me out a few hours later anyway as price popped up in that early NY move.

It’s a scrappy week for my strategy so far.