Another GBP/JPY scalp that was taken early…
:24::24::24:
Nice trade Ali, I caught 30 pips off the Cable for the LC just now. =)
I was kind of hesitant to take it, as I didn’t do much analysis, for a few weeks now, but it worked out. I’m glad. It was an OTE with confluence of another OTE and as well as being ~50 pips below ADR low.
…and another. Didn’t take this one because I was distracted with some other stuff, but I think I would have been all over it given that it came a little later than GBP/JPY , and that had already shown strength.
Let me know if you are getting bored with all these screenshots…I think everyone gets the message by now. Maybe I’ll just start posting the unsuccessful ones and showing why I think they didn’t work.
Regards
EDIT: THIS ONE DID NOT RETRACE 20% OF THE DAILY PIPS BEFORE SET-UP AND SO I ACTUALLY WOULD NOT HAVE TOUCHED IT.
Hello,
Wanted to ask if Ali or your Clark trade fits with all the LC philosophy, over the range and back to it (well or extension or retracement). Both guppy and cable went over the range, than retraced way before LC, do you take similar trades often?
As far as screenshots concerned the more the merrier, unless you want to stop please continue
Actually I just went back to this last trade and realised I was a bit trigger happy with the post! It didn’t retrace the 20% that I thought it did so IT IS INVALID! The first of MY posts fits the criteria, the second one, although a valid OTE, didn’t retrace enough for me to have fulled my Fib on it.
I am not sure what guppy is?? The trades where Cable goes over the range early and then comes back AT LONDON KILL ZONE are usually very nice set-ups. I do want to see it make it to LC though…I don’t have enough experience touching it at NY Open.
Guppy is GBP/JPY some call it geppy or the beast, posted almost at the same time as you posted eur/jpy sorry for confusion.
EUR/JPY trade is one more reason to post those screenshots
Clint,
Thanks so much for the detailed reply! I was early by 1 hour for the LC kill zone so thank you for clearing that up for me.
Randy
Only for you Ali 
I don’t really look more than 5 days previous anyway, but sometimes I’ll check out how the average range is doing. The average range for the Fiber is considerably higher than the Cable, which is backwards in my mind. Cable was always the big mover for my first 3 years of trading. Maybe it’ll start picking up again when all the EU related problems simmer down…
PS
this will only be useful if you decide to continue marking the ranges at GMT 00:00. It coincides with Tokyo open, but some might prefer having their ranges start at New York 00:00
Hello, Aaron
I was interested to see your daily price ranges. Nice table, neatly organized.
Please help me to understand the predictive value of these numbers. As I understand it, you use yesterday’s price range to predict today’s price range. Do I have that right?
Looking at your table, for the past 10 days of GU trading, I see:
How are you able to use these data in a predictive way?
Or, am I missing the point entirely?
This would make a really good indicator, but I think the set pips there might lock it into one currency pair, and won’t always work as you want it to as there are periods of low volatility and high volatility that may end up giving you false information.
Rather than a set amount of pips, it may be a better idea to base the indicator off of ATR, smoothed over x days. This will allow the indicator to be extremely flexible, and work on any currency pair, on any timeframe.
Under 75% ATR could be red
75% - 125% could be amber
125% - 200% could be green
200% + could be purple
Perhaps use a 10-20 day period to smooth the indicator. Those values are just examples, may need to be tweaked a bit more to align with what you’re looking for.
I look for an expanding range cycle. Remember when ICT showed the ranges expanding and contracting on a daily chart? I’m trying to apply that to my trading. The clearest way to see it is on that bar chart I posted a few pages back. If you don’t see it there, perhaps you should just avoid the concept… :41:
I’m going to sound like an ATR salesman with 2 posts in a row pertaining to it, but you should plot it on your daily chart to get a better visual of the expansion and contraction of the daily ranges. I may be mistaken on this, but from what I understand, most people are looking at a 14 or 20 day period on ATR, so those would be worth checking out. Like any indicator, the smaller the timeframe, the choppier it will be. I tend to look at 20 days.
Well if you get to play the salesman, I’ll play the skeptic.
Plotting ATR seems a little pointless to me, the value doesn’t change more than a pip week to week, so you might as well just check it once at the beginning of the month and just remember that value. It’s not going to change your trading decisions if the ATR changes from 152 to 151…is it?
EDIT:
actually I did plot the ATR(1) at one point. It was the only parameter that had any value to me. But if you’re going to plot it like that, might as well just record the values on an excel sheet, because then you get to see the High/Low that is attached to that range.
From your data, what do you predict will be the range of the GU on Monday?
Plotted on a daily GU chart from the last year, my ATR indicator shows a range from a high of 260 pips/day to a low of 112 pips/day and everywhere inbetween. That is based off a 14 day smoothing period. ATR is Average True Range. I forget exactly how it’s calculated but it isn’t the same as Average Daily Range but it should give you an idea of the market’s expansion and contraction.
Check out Average True Range (ATR) - ChartSchool - StockCharts.com for an explination of how it’s calculated.
Friday’s range was 167 pips. The range has already expanded. I see no point in trying to predict the range for monday at this point.
Let me note the Buildup to that 167 day however.
Wed, June 8 [B]98 pips[/B]
Thur, June 9 [B]108 pips[/B]
Fri, June 10 [B]167 pips[/B]
If you find the ATR indicator helps you with your trading, you should use it. I thought that indicator idea you had about marking the Daily candles according to their relation to the Average Range was quite interesting. I don’t know if I would use it, but I could see it being helpful
If I could jump in with my 10 yens worth…
I don’t think Ake (can I call you Aaron?) is using it to predict precise values for the next trading day, right? It is merely being used as a probability tool. What I can see from my new data (thanks Aaron…you are a generous man 
is that[B] Fiber[/B] is currently experiencing 150+ pip days every 3 trading days. Now I am not being as bold as to say you should only trade 3 days after the last high range day, because this tool is not that accurate. But what you can do is look at the bar chart and say, well we had a 150+ range day on Thursday and Friday, there is a likelihood that the range will contract for the next few days. And as each contraction day passes, the probability of the next day being an expansion day increases.
As for [B]Cable[/B], well I’d like to be trading the days when the range is 170+ pips. Since the start of May there have been 7 such days. 5 of these 7 days saw very similar range expansion on the two days preceding the 170+ pip day. Let’s call the 170+ range day ‘Day3’ for clarity. I can see that both ‘Day1’ and ‘Day 2’ were at or under 125 pips, and ‘Day 1’ was always lower than ‘Day 2’. So you can see that the ranges are building up ready to pop for a big range day.
Note: These figures are very rough numbers that I am just coming up with based on looking at the bar chart. By analyzing the figures as Ake does, you can screw down to a more accurate level.
Anyway, that is my take on it as it stands. The interest I have in this tool comes from the fact that even when I do start to trade London Close, I want to narrow down the time I spend in front of the charts, and this seems like it could be a good filter. If I can have London Close trades putting pips in the bank on a near daily basis, I won’t care if I miss the odd large range day here and there due to pattern anomalies. That seems a little bit topsy turvy spending long period of time looking for scalps at LC and having LO as my second choice, but its all part of the Master Plan :22:
I don’t really use it too much in my trading, just thought it might help to give a more visual look at what you’re doing with recording the ranges, possibly looking at the longer term to see if price is approaching a high volatility range or low volatility range. Obviously we are looking for changes from low volatility to high volatility to set up for better day trades. I have used it in the past, but only to set position sizes on trend trades.
Jaroon actually had the idea for the colored candles, I just thought that a moving window of price range would be a better idea than a set pip count defining a low range or high range bar.
I would also like to give my two cents regarding the ADR.
I just take a quick glance at what the ADR is for the pairs I trade, and not precise exact numbers. Just to have a general idea of how much gas could a potential move have. The rest is up to technical projections (Natural support/resistance levels, fibonacci levels and pivot points).
Theres this website (Mataf dot net) where you can check the ADR for the pairs you want, and even check the volatility for specific time of the day, and also ranges for every day of the week. Very useful if you apply this tool just aa a reference into your trading and don’t like to have it displayed in your charts.
Hope this helps.