Trading Confluence with Petefader

Trading Systems Free Forex Trading Systems
1

Welcome!

Here I’ll be showing how I apply some common tools. This is in addition to my use of VSA, which can be found here. http://forums.babypips.com/newbie-island/41475-supply-demand-vsa-wyckoff-petefader.html

As we know, this is a game of probability. If there is an increased chance price will turn at a support level, the chances will increase further if it’s converging with a trend line, and so on. Nothing new there. It’s stacking confluence for better probability. I’m using a list of the things I’ve found most useful over the years.
…

Some of the most basic yet crucial tools will be covered here. When combined, it’s the closest thing I’ve found to a crystal ball. :slight_smile:

  1. VSA/phase
  2. SR and prev s=r r=s
  3. 50-61.8 fib zone
  4. Trend lines, channels, triangles
  5. wave count, symmetry
  6. double top/bottom, fake break, H&S
  7. 50 EMA 1hr, 4hr as SR
  8. pivots
  9. Divergence

Not all of them have to be used, especially if you find it overwhelming. For others, it will be fairly easy. I’ve spent enough time with each one that it’s second nature to run through the list. I like a minimum of 2 to line up, with certain requirements.

You will often find things fitting together like puzzle pieces. Not just 1, but the next 2 or 3 most likely swing points may even be plotted. Proper entries, stops and targets can be determined through this method. I will post charts showing how I apply everything. There are details to cover.
…

For me, getting organized like this makes me more focused. I’d like to finish out this year well. I’m sure it will be helpful to others too.

I’ll kick it off with this A/U long setup, 1hr chart.

au trade.jpg700×407 47.2 KB

There were initially at least 3 reasons to buy at point B.

  1. Fib zone
  2. Stopping Volume off the lowest price means strength in the background/accumulation. (VSA/Phase)
  3. Price had made 5 waves down (clearer on the 4hr chart). With a basic 5 wave count approach, price was due for a minimum 3 corrective waves…or ABC retracement waves. (I’ll talk about this more)

There was also initially a double bottom to stop wave 5, increasing the probability that it was indeed the end and headed for corrective waves.

An additional reason appeared when a triangle breakout occurred at the dotted line, wave C (triangle not drawn). So by the time price shot up there were at least 4 reasons before.

My method of trading VSA is covered here: http://forums.babypips.com/candlesticks-chart-patterns-price-action/41475-supply-demand-vsa-wyckoff-petefader.html

More to come. Contributions and questions are welcome.

2

It is better to figure out market phase with time, i.e. Asian Session is Acc/Dist phase, then London will take stops out before marking up/down, however this will not happen until enough Acc/Disc, but you will all know that on this thread.

S/R of course, goes without saying.

50-61.8 Fib zones, you need to look a little further, up to 80%, you are absolutely right when you say never trade into a 61.8 zone, but you still need to be looking for entries out of until 80%, 70% is the ‘sweet spot’

Trend lines, channels, triangles, yes, well, ok if you must.

Wave count, Elliot Wave is far too dated to be of any real use long term in Forex trading, it does appear, but it’s not reliable enough, and it it’s not frequent enough, however market symmetry is a much better prospect, it’s the narrowed down version of EW.

Double Tops, yes, ok.

Fake Break - Absolutely crucial, it has been termed Judas Swing, and timing of the day must be taken into consideration.

Pivots - great for confluence, you might want to add Traders Trinity to that, highlights confluences very well.

Divergence - pah, huh it dont exist, there is no such thing as divergence, it’s a total fallacy, complete garbage, however I have been persuaded to have this thing on my charts called an Oscillator thing at the bottom with corresponding lines on the high low and the high low of the chart, when one line goes up and the other goes down you have divergence!!! I don’t believe a word of it :smiley:

For learning a trading plan strategy, I say only ever stick to one pair, 2 at most.

Some of the above are facts, others are opinions, I’ll leave you guys to figure which :wink:

4

Well, that’s your opinion.

5

I’ve made an awful lot of money trading a diabolically simple little MACD divergence/price action pattern over the years.

And what was the purpose of the rest of your post? I don’t agree with most of the strategy ideas I see in this part of the forum, but unless it’s just blatant pandering, or outright damaging, it’s not my place to agree, disagree, or shoot down ideas. This thread was neither.

Sometimes opinions are better kept to one’s self.

7

I see you are CURRENTLY a big fan of ICT just like you used to be of Pete’s VSA a while ago…
I wonder why you stopped posting on Pete’s vsa thread and jumped the ICT bandwagon…'coz i really liked your contributions!
As far as i can say vsa is still a solid, robust and reliable strategy…just waitin for Sept. to sink in so that normalcy returns and we get good vsa setups as usual…

8

What’s standing out to me as a high probability trade on this pair is the symmetry leading it down to 61.8, and trading the bounce. If price reaches there I’d check for further confirmation.

au4hr 8-27.jpg700×491 52.1 KB

11

Glad to be part of your new thread Pete. Looking forward to seeing what is coming. :slight_smile:

12

Another look at the 5 wave markup, and ABC retracement pattern. Sometimes the ABC ends up being 5 waves, but that falls into the category of being wrong and still making pips. In this example you see the importance of simple support/resistance for early targets in case things don’t play out further…taking some profit and locking break even there.

ej4hr 8-27.jpg700×491 49.9 KB

If your just getting into wave counts, here’s one simple rule that will help clarify things. (not always a clear count, but we have other tools and we don’t get caught up)

*Wave 4 cannot enter the PRICE area of wave 1, otherwise you have no count. I allow for a quick pop and rejection but that’s it.

The end of wave 1 is a very strong s/r point going forward, so if wave 4 does come to test it, it’s time to look to enter to catch wave 5.

13

The fractal nature of price movement is shown here. Waves within waves.


14

i love your vsa stuff and you’re great teacher but i think you’re making a mistake by adding more noise in your trading…stick with the vsa and wyckoff…

15

I’m not really adding anything. Most of the things listed in the first post I have always used.

I just wanted a place to discuss the non VSA stuff in more depth, so my VSA thread didn’t seem like the right place.
I think of it as a tool box…you don’t have use all the tools all the time.

The thing I really want to try to get across is this. It’s all just different ways of seeing the same thing!
You like Wyckoff? OK, so a Mark Up phase is often has 5 waves. 50-61.8 zone often marks the pullbacks. Support becomes resistance, resistance becomes support. The standard wyckoff model when the AR resistance get’s tested and acts as support. etc. etc… Most of it is already there screaming at you to notice.

I see you’ve been a member for 5 years and your only 2 posts were to say this lol. What’s been your experience with the VSA/Wyckoff method? Do share. :slight_smile:

16

Just thinking ahead since I have some time. Both purple lines are equal in pips. It could give a fake break below support for a long setup. Ideally the entry on a fake break is when a 1hr candle closes back into the range. I would have to see volume back it up, the higher the better, then possibly a no supply test and all that. The grey box on the bottom is a fib zone of a large up swing giving more confluence.

  1. Symmetry
  2. Fake break
  3. Volume
  4. Fib

It’s not a set and forget situation, it’s a “see how it goes when price gets there” situation. Hopefully I’ll be able to.

aj1h 8-27.jpg700×491 52.5 KB

Fake breaks often occur in this environment…unclear wave counts and/or phase. This is also an old support area from the beginning of the Month.

I’m also keeping an eye on that A/U opportunity I posted earlier.

17

That last chart shows why I like the 50 ema as s/r confirmation during a trending move. Look at all those rejections on the way down.

For trading the main intraday moves I’m looking at the 1hr and 4hr, but really…a 50 ema on a 4 hr chart is the same as a 200 ema on the 1hr. Hurt your brain? Sorry lol.

Anyway, its fractal. I’ve used it on the 5 min going back to my old Mad Scalper days.

18

First of all who cares how many times someone posts…I used to follow the vsa thread vsa with malcomb at forex factory…great thread but that died out as with most vsa threads so I found your threads…I have learned a lot from your threads I just hope the vsa and wyckoff stuff doesn’t get replaced by some useless lagging indicators…that would be a shame…what percentage of this new thread will be vsa/ wyckoff vs other tools…ie macd…MACD with Petefader doesn’t have a good ring to it…

19

price broke through the support… now we would just have to wait for it to pop back up with high volume right?

20

kiss my white ass 8-28.gif548×592 14.9 KB

So of you guys don’t like this stuff, ya know…I can stop posting. :wink:

21

I hear ya. Don’t worry man, nothing is getting replaced. Give me a little credit here…the guy that made VSA make sense is not going to trade off “lagging indicators” all of a sudden.

MACD is averaging price change and time, I have 1 specific use for that. Notice it’s last on the list. It’s roughly in order of importance.

Also, you like Malcolm? I’ve seen him count waves, use RSX for divergence…and a barrel of other $hit. My allegiance is to whatever makes me pips, not Williams or Wykoff etc.

Anyway…

You can certainly participate in my VSA thread, I will look to post there as well. Peace.

22

Here’s one you folks may have spotted.

  1. Trend line
  2. Fib
  3. Previous resistance = support
  4. 50 EMA
    (I found the VSA situation to be inconclusive here, took the trade with a medium risk)

gu4h 8-28.jpg700×407 45.2 KB

gu2 828.jpg700×500 56.1 KB

23

It broke down too far and stayed there too long to take the trade. For a fake break entry, I like to see only one 1hr candle break out and the following candle to close back into the old range.

24

Negative batman this is more my style of trading and I like what I am seeing. Great stuff as always