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KeenPips May 15, 2016 7:18am | Post# 1

Trap the Market
 
Do you swing trade? Do you trade on 4-hourly time frame or higher and hold trade positions longer than 4 hours? For consistent trading success, you will have to track, stalk and trap the market. The focus of this thread is to share ideas, experience, strategies and approaches that help trap or beat the market in short to medium-term swing trading, including trading on HTFs and holding positions longer than 4 hours if the TP target or market condition requires it.

To define, watch, wait for, and trap the market is the heart of short term swing trading. In the context of swing trading, trapping or beating the market involves:
1. Clearly defining the significant zones or boundaries and conditions in which price action will be to bring in desired trade results;
2. Carefully reading and watching the market;
3. Patiently waiting for the right time and for all signals to align or fall in place; and
4. Decisively striking when the best opportunity to beat the market presents itself.
You will not get it right 100% of the time but you will have consistently good trading results to make you a successful trader overall. In a subsequent post I will address some aspects of the above four points the way I presently see them.

I trade primarily off the daily and 4-hour charts and my system is based on trading their turning points or zones mainly in terms of S/R and pivots using 10 and 20 EMAs, and RSI. I will present my approach and strategy to trapping the market as a short to medium-term swing trader and I will also share ideas, experience and trade charts.

I don't aim to use this thread to focus on teaching any specific trading system or strategy, a reason why I didn't open it under 'Trading Systems' section. Nevertheless, I don't want to get involved in debating the definitions or merits/demerits of swing trading. I see myself as a short term swing trader, holding more than 60% of my trading positions longer than 12 hours if my TP target or the market condition requires it and primarily trading off turning points on the daily and weekly TFs. I invite FF members who do swing trading of whatever hue - including trading on HTFs and holding positions longer than 4 hours when the TP target or market condition requires it, to share the strategies, approaches, rules, and techniques that they practice or know that work for them in achieving successful trading results. The posts may cover aspects of the four points itemized above or other aspects regarding their trading styles, systems, experience, methods, rules, strategies, etc.

This thread is not about scalping. I started Forex trading as a scalper in 2011 and in my four years as a scalper I didn't do well, blowing at least three live accounts in the process. However, I have nothing against fellow traders who are scalpers and who are doing well with their strategies; only that the focus of this thread, and my present trading style which seems to suit my personality, is swing trading and trading on HTFs like 4-hours and higher - using such HTFs for trade direction and trade set-ups but not chasing the market; and holding trade positions for longer than 4 hours if the market condition or TP level requires it. This doesn't mean dropping down to a lower TF, e.g. 1-hour/30-minute, to fine tune trade entry will be out of place. But high-wired intraday trading will not fall under this category.

As for rules...No trolls, no scamming, no foul language. Just share your knowledge, experience, trades, rules, ideas, methods with respect and humility and avoid abusive or insulting language. If you subscribe to FF members' ethics you would be seen as a valuable contributor. This thread is not for the Forex 'gurus' or 'experts' who feel they know it all and believe they are always right, and who are not ready, willing and able to learn (particularly from those they see as 'newbies') or tolerate contrary views, analyses, strategies or approaches.

When you post charts, videos or other attachments, please include a brief explanation/ summary of what you are trying to convey; essentially explain any attachment or method a bit. Please, don't ask for my TE because I am not here to prove or sell anything; and the results I get from my trading are purely personal and I want to keep it so.

For me, the primary purpose of membership in FF is to learn and share ideas and experience for better trading results. I'm a learner, and I want to keep learning and sharing. If you are certain about what works for you in swing trading in the context of how this thread sees it, share it here. If you have experience of any swing trading system, rule, approach, method, or strategy that doesn't work for you, equally share it. So, let's focus on what helps us to better trap or beat the market. Let's collaborate to make our market-trapping or market-beating experiences count for consistently successful trading results. Thanking you all in advance for doing what the FF community is primarily all about: learning and sharing.

KP

KeenPips May 15, 2016 2:37pm | Post# 2

2 Attachment(s)
Defining significant boundaries or zones and conditions within which to stalk the market involves using key turning points on the daily and weekly time frames. Therefore, it is important to learn how to identify such turning points. Personally I start my chart preparation every Sunday first with identification of significant weekly S/R zones for the seven pairs I watch. Then I move down to the daily time frame to identify and draw the S/R zones on the daily time frame. I use the candlestick charts to draw the S/R zones which I then fine tune with the line charts. Besides, as turning levels/zones are central to my mapping the boundaries to stalk the market, I use an indicator that automatically draws the daily, weekly and monthly pivots. All the above set the stage for applying the right strategies for my short-term swing trading. I update the daily TF S/R zones at the beginning of each day.

Attached are the 4-hourly AU and NU charts I prepared today.

KP

Click to Enlarge

Name: AUDUSDH4_Chart Preparation_May 15, 2016.png
Size: 29 KBClick to Enlarge

Name: NZDUSDH4_Chart Preparation_May 15, 2016.png
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KeenPips May 15, 2016 2:44pm | Post# 3

Just a clarification on the colours: the Sandy brown indicates weekly S/R zone; the Khaki indicates daily S/R zones.Furthermore, usually, I identify two S/R zones, one above current pa and one below it; i.e. making a total of four S/R zones - two weekly, two daily.

KP

KeenPips May 15, 2016 3:56pm | Post# 4

2 Attachment(s)
Prepared EURJPY and USDCAD 4H charts are attached.

KP

Click to Enlarge

Name: EURJPY_H4_Chart_Preparation_May_15,_2016.png
Size: 18 KBClick to Enlarge

Name: USDCAD_H4_Chart_Preparation_May_15,_2016.png
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KeenPips May 16, 2016 4:16am | Post# 5

Part of defining the boundaries and zones to track, stalk and trap the market is using dynamic S/R lines such as trendlines and moving averages. I use two EMAs, 10 & 20 for this purpose. Anything longer will be too slow for reversion to the mean and for sensitivity to pa. There are other traders who use Bollinger Bands but I prefer the two EMAs.

KP

KeenPips May 16, 2016 7:47am | Post# 6

Part of defining the boundaries and zones to track, stalk and trap the market is using dynamic S/R lines such as trendlines and moving averages. I use two EMAs, 10 & 20 for this purpose. Anything longer will be too slow for reversion to the mean and for sensitivity to pa. There are other traders who use Bollinger Bands but I prefer the two EMAs. KP


Once in a while, particularly on the daily and weekly charts, I use the 50 EMA as a tracking or confluence factor when pa gets to an important zone. This use of 50 EMA, however, is part of the tracking and watching mechanism.

KP

KeenPips May 16, 2016 12:07pm | Post# 7

Importance of watching, tracking and waiting patiently to trap the market put succinctly by James Rogers:
‘I just wait until there is money lying around the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime’ – James Rogers

KeenPips May 16, 2016 12:20pm | Post# 8

Importance of watching, tracking and waiting patiently to trap the market put succinctly by James Rogers: I just wait until there is money lying around the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime James Rogers
After mapping the zones and defining the conditions for trade success, he would wait for the opportune time.

KP

KeenPips May 17, 2016 3:20am | Post# 9

Imho, AU and NU are testing a daily resistance zone, GU is filling the gap (rejection candle) created on last's weekly TF, and any EU upward move is a retracement to test immediate resistance zones. My plan as a short-term swing trader: step aside. Keep watching and waiting.

KP

KeenPips May 18, 2016 2:32am | Post# 10

EURUSD's bearish tone is still potentially strong. All the HTFs - 4-hourly, daily, weekly and monthly - favour the bears. Atm, pa is at a 4-HR S/R area which it will easily shake for its southward move as there is no immediate significant barrier on the way; the daily pivot, weekly pivot and monthly pivot are all far to the north. So any retracement would not likely be to any extreme unless there are fundamentals (e.g. EUR and USD data releases later today) that may ruffle the current technical disposition. As I have been in a short trade position on the EU for a while, my interest will be to see how farther south the move will be to favour my take profit target. Green pips to you.

KP

KeenPips May 18, 2016 2:54am | Post# 11

3 Attachment(s)
EURUSD's bearish tone is still potentially strong. All the HTFs - 4-hourly, daily, weekly and monthly - favour the bears. Atm, pa is at a 4-HR S/R area which it will easily shake for its southward move as there is no immediate significant barrier on the way; the daily pivot, weekly pivot and monthly pivot are all far to the north. So any retracement would not likely be to any extreme unless there are fundamentals (e.g. EUR and USD data releases later today) that may ruffle the current technical disposition. As I have been in a short trade position...


See attachments:

Click to Enlarge

Name: EURUSD_Weekly_Top_Down_May_18,_2016.png
Size: 19 KBClick to Enlarge

Name: EURUSD_Daily_Top_Down_May_18,_2016.png
Size: 20 KBClick to Enlarge

Name: EURUSD_4-HR_Top_Down_May_18,_2016.png
Size: 20 KB

KeenPips May 18, 2016 4:47am | Post# 12

Nuggets: It is risky to get into the market just because there is an ongoing strong trend. You have to wait for a pullback or a trend continuation setup. If this does not happen, stay out of the market.

inRoozaan May 18, 2016 5:34am | Post# 13

Just a clarification on the colours: the Sandy brown indicates weekly S/R zone; the Khaki indicates daily S/R zones.Furthermore, usually, I identify two S/R zones, one above current pa and one below it; i.e. making a total of four S/R zones - two weekly, two daily. KP
Hi KP,

Wish the best and I will check this as I prefer swing or ultra-day trading, as I could have better time arrangement and trade performance could be as good as other systems.

Regarding your chosen colors for SRs, if you don't mind, label them on your charts - or couple of them- to have better idea on your points; also, could you please sketch or attach a typical example of trades you are after.

Thanks

KeenPips May 18, 2016 5:52am | Post# 14

{quote} Hi KP, Wish the best and I will check this as I prefer swing or ultra-day trading, as I could have better time arrangement and trade performance could be as good as other systems. Regarding your chosen colors for SRs, if you don't mind, label them on your charts - or couple of them- to have better idea on your points; also, could you please sketch or attach a typical example of trades you are after. Thanks


Hi InRooz, I will endeavour to label some in future. Currently, I am not entering any trade but managing the ones I have been in for a while: EU bearish, GU bearish and NU bearish. Green pips to you.

KP

KeenPips May 19, 2016 3:19am | Post# 15

3 Attachment(s)
I want to present an outlook on the AUDUSD. I have been trading this pair for a while and I like the fact that it respects technical indicators, e.g. MAs, and is fairly predictable. Yesterday, I closed a sell trade on this pair because I wanted to reduce the number of my open trades. I am still bearish on the pair, as a short-term swing trader. The trend on the HTFs I use - 4 hourly, daily and weekly - and their RSI readings are aligned with a further southward push for the pair. The shooting star formed on Tuesday on the daily chart was reinforced by a strong bearish candle yesterday. As the price action has just left the DPP, it will be good to wait for a pull back to around the DPP to enter a sell trade upon confirmation with a bearish candle. Green pips to you

See attachments.

Click to Enlarge

Name: AUDUSD_Daily_Top_Down_Analysis_May_19,_2016.png
Size: 23 KBClick to Enlarge

Name: AUDUSD_4-Hr_Top_Down_Analysis_May_19,_2016.png
Size: 21 KBClick to Enlarge

Name: AUDUSD_Weekly_Top_Down_Analysis_May_19,_2016.png
Size: 24 KB

KeenPips May 19, 2016 3:37am | Post# 16

USDCAD is disposed towards further upward movement. I am watching the pair. Any pull back towards DPP will be of interest to enter a long trade.

KP

KeenPips May 19, 2016 3:44am | Post# 17

2 Attachment(s)
USDCAD is disposed towards further upward movement. I am watching the pair. Any pull back towards DPP will be of interest to enter a long trade. KP
See attachments:
Click to Enlarge

Name: USDCADDaily_Top Down Outlook_May 19, 2016.png
Size: 26 KBClick to Enlarge

Name: USDCADH4_TopDownOutlook_May 19, 2016.png
Size: 24 KB

KeenPips May 19, 2016 6:04am | Post# 18

Tip:

Forex trading should be planned. The plan should involve a set of functional and efficient system and strategies.

KP

KeenPips May 20, 2016 9:31am | Post# 19

1 Attachment(s)
The outlook on EU is still bearish. Imho any northern move will be to test the bearish fall from around 1.1285 on the 4-hour chart.

KP

See attachment:
Click to Enlarge

Name: EURUSD_4-Hr_Outlook_May_20,_2016.png
Size: 21 KB

KeenPips May 22, 2016 5:27pm | Post# 20

Last week, bears managed to push GA down from a significant resistance zone. Although the 4-hour tf indicates a disposition southwards, the outlook is still unclear on the daily chart, and both the weekly and monthly tfs tend northwards. Imho, the best action for a swing trader will be to wait for a clearer market disposition.

KP


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