Analysis and Trading based on Envelopes, Waves, Cycles
Hello ParisBoy,
I try to understand your trading, but i am lost.
I see the theory but in pratice, with 3 enveloppes (and sometimes 6 when you double), i dont understand when you take a trade.
There is a lot of "resistance" and "support" with the upper, middle, and the lower of each enveloppes. And if price reach one resistance, you sometimes double, to fit the price.
If i understand well, sometimes you enter a trade on a simple diagonal, which is a simple resistance or support too. This classic trading is dangerous cause the diagonal move (lots of false break of the diagonal)... and then why you need the enveloppe to take a trade on a simple break of diagonal.
Well, i am sure i dont understand your trading, cause of my poor english, and cause of my poor lost brain
Anyway, firts time i see this type opf trading here, and quite far from my style, thats why i am double interested.
have a nice week end and green pips to you
Amicalement
I try to understand your trading, but i am lost.
I see the theory but in pratice, with 3 enveloppes (and sometimes 6 when you double), i dont understand when you take a trade.
There is a lot of "resistance" and "support" with the upper, middle, and the lower of each enveloppes. And if price reach one resistance, you sometimes double, to fit the price.
If i understand well, sometimes you enter a trade on a simple diagonal, which is a simple resistance or support too. This classic trading is dangerous cause the diagonal move (lots of false break of the diagonal)... and then why you need the enveloppe to take a trade on a simple break of diagonal.
Well, i am sure i dont understand your trading, cause of my poor english, and cause of my poor lost brain
Anyway, firts time i see this type opf trading here, and quite far from my style, thats why i am double interested.
have a nice week end and green pips to you
Amicalement
Bottomless wonders spring from simple rules, which are repeated without end
- #170
- Edited 5:48am Nov 11, 2017 5:28am | Edited 5:48am
- Joined Nov 2008 | Status: Trader | 3,270 Posts
- #171
- Edited 1:45pm Nov 11, 2017 1:28pm | Edited 1:45pm
- Joined Oct 2017 | Status: Trader | 12,472 Posts
- #172
- Edited 2:12pm Nov 11, 2017 1:58pm | Edited 2:12pm
- Joined Nov 2008 | Status: Trader | 3,270 Posts
Thanks Medici some additional Key Concepts
I am glad that my example was useful to that end.: a) coming from Jim Hurst VTL = Valid Trend Lines
I have mixed feelings for trendlines as trading tools. Already at point B, both the red and the green channel are pointing up - and price is touching the red midline. Point C is not supported by either midline, As a point of entry the bars following point C feels a bit more risky, as there is the possibility of a pullback to the red omidline before continuation - unless one waits for the trend to pick up steam.
Comments?
b) coming from me - the 3 Envelopes are trending UP you should consider a Long position you should avoid short position even as an intermediary correction
Very good point, which I have faulted on many times - taking a 30 point countertrend trade only to miss the 100 point trend trade.
-the Lower Limit of the yellow Envelope has merged with the green mid curve of the green Envelope (red arrows) AND the Upper Limits of the green and yellow Envelope are merging with the Upper Limit of the red Envelope (yellow and ocre arrows) this fact is an indication of the strength of the Uptrend
Which makes these points excellent spots for adding to a position.
Thank you very much!
- #173
- Edited Nov 12, 2017 2:48am Nov 11, 2017 2:40pm | Edited Nov 12, 2017 2:48am
- Joined Oct 2017 | Status: Trader | 12,472 Posts
- #175
- Edited Nov 12, 2017 2:49am Nov 11, 2017 3:10pm | Edited Nov 12, 2017 2:49am
- Joined Oct 2017 | Status: Trader | 12,472 Posts
Killing 2 birds with the same stone !! 
a) as long as Price fluctuates ABOVE the Ascending green Valid Trend Line (VTL) (31°) you know that the Uptrend goes on and that Down movements are corrections
b) Price broke suddenly the Ascending VTL. You have an Action Signal to short , but here it was a "Waterfall Event" as Martin Armstrong defines. You have not the time to benefit from it
c) Price reaches roughly the Lower Limit of the Envelope 256 Time Unit (brown) then turn Up.
I followed the Counter Trend Movement . Why ?
Because of the Amplitude of the Envelope (2 x 62,5 ) = 125 points
Even if I waited for confirmation, you can reasonably take some points with such an Amplitude
I sold when price reached the (visually estimated) Centered Moving Average 32 Time Unit (in blue)
Such counter trend patterns are common
a) as long as Price fluctuates ABOVE the Ascending green Valid Trend Line (VTL) (31°) you know that the Uptrend goes on and that Down movements are corrections
b) Price broke suddenly the Ascending VTL. You have an Action Signal to short , but here it was a "Waterfall Event" as Martin Armstrong defines. You have not the time to benefit from it
c) Price reaches roughly the Lower Limit of the Envelope 256 Time Unit (brown) then turn Up.
I followed the Counter Trend Movement . Why ?
Because of the Amplitude of the Envelope (2 x 62,5 ) = 125 points
Even if I waited for confirmation, you can reasonably take some points with such an Amplitude
I sold when price reached the (visually estimated) Centered Moving Average 32 Time Unit (in blue)
Such counter trend patterns are common
- #176
- Nov 11, 2017 3:10pm Nov 11, 2017 3:10pm
- Joined Nov 2008 | Status: Trader | 3,270 Posts
Medici - Valid Trend Lines work most of the time here you see the ascending green trend line 11 % - Trading View has a tool showing the Angle of the Trend - speed and accelaration price suddenly accelerated UP but it allows me to take my cut 40 points thogh I entered very late I sold when price was in the area of the Upper Limit of the Envelope 256 Time Unit (brown) {image}
Brilliant example of how to take advantage of momentum late in a trend.But here the 11 degree line appears reliable only after having been established by the first two touches. Then when price comes back it is well supported, and one can enter as momentum picks up.
Similarly, in the previous example based on my chart, the blue trendline is established only after it has been formed after price leaves C. Then a good point of entry appears when the trendline supports the movement through the green midline, which I would consider the first point after C to enter.
So I guess the question is whether to
1) Enter at C supported by the lower yellow envelope, or
2) Wait for the trendline entry at price pushes through the green midline?
Here's an example where the philosophy of entering early seems to be the way to go. Entering supported by the green lower envelope at the whilte line segment seems like a good choice, at least in hindsight, given the four hours meandering price movement before the upper green envelope is hit four hours later with about 60 point gain.
- #177
- Nov 11, 2017 3:27pm Nov 11, 2017 3:27pm
- Joined Oct 2017 | Status: Trader | 12,472 Posts
{quote} Thank you
Then a good point of entry appears when the trendline supports the movement through the green midline, which I would consider...
It does not mean that Targets can not be reached on the Upper or Lower Limits of the red Envelope, but probability is lower
IMHO you can not enter at C (option 1) because you need confirmation that the trend turned Up.
So it leaves Option 2 Wait for the entry when price push through the green midline
This kind of Trading is called "Mid-Band Transaction Timing" by Jim Hurst and described page 82 to 84 in his Book "The Profit Magic of the Transaction Timing"
