Ivob's channels, volume, and VWAP thread (EUR/USD)

We are currently still inside yesterday's range at low of day. Moved only 30 pips so far.
Volume is low at this moment. Trend is down but we haven't tried to break the upside yet.
I expect more directional movement than yesterday. It's Tuesday and there is news.

Strategy: wait for pt3 down on 5min or volume climax and FTT for long. Outlook on the daily is the same... (bias is long)

Ivo

Thought process.

1. Circled area: volume climax.. highest of day. Volatility Extension in down channel. Action: I'm on alert
2. taken out by decreasing volume..closing at high. Action: decision to buy
3. next bar trying to reach trendline, forming an FTT (failure to traverse). Action: buy
4. strong green bars closing at high!..no stopping until trendline: action: alert for BO
5. at trendline low volume... there is no resistance: action: alert for BO
6. BO: action: hold. But took some partial profits.

After BO we wait for a point3 up and add to position. That is the status right now.

Ivo

Anticipated Pt3 up on the daily seems to be working out. The 5min was shaky and choppy..

Nice bounces!! Trendline+VWAP.

preflight check

moved 51 pips so far.
Trend is down, support around 1.2340

updated chart.

Long has room until trendline. The sequence is 1-2-3... we had pt1 and possibly pt2... after what we wait for a pt3 up.

Ivo

pt3 up was formed.

This bar did not scare me (at all)... Even added some to the position. it's all part of the sequence. After 3 bars up and BO we always get an attempt to a point 3 up... It is time now to move the stop to BE. We are still in a downchannel...

Ivo

Some issues about execution and how to use it to your advantage.

I usually place a pending stop order, 1 pip away from breakout.

By the way I noticed brokers play funny tricks... such as:
- triggering orders completely outside the bid/ask right after market turned against me.. order should not even have been triggered + I get a very bad price. Actually this would be a reason to consider to reverse the position....Not too quickly though because brokers don't know either where the market is going..
- excessive slippage.
- sudden platform freezes at inconvenient moments.
- delaying orders..
- etc.

I just think it is very funny how they look for a way to make easy money.

Anyway, so after an order is triggered I look very carefully for 3 things:

1. My price should be within the bid/ask at moment of triggering
2. But I do not want a very good price for my stop order... Think about it.. A stop order is an order that becomes a market order when triggered. I want there to be buying pressure (if I want to buy) so if sellers are able to sell to me at a good price (for them..) then there is buying pressure. People are eager to buy so sellers ask for a good price!!! It's normal.. If everyone wants to be why would the seller sell at a low price?? If he sells at a low price it's because people want to sell and not buy..
3. End of bar I want a profit.

If I put a buy stop order (1 pip after breakout) at 1.23761 and I get it for 1.23761 or even better I instantly close my position... I even have an Expert Advisor for it. I want it for 0.2 pips more.. at least.. (but within the bid/ask...). If not then I am on the wrong side or at least my timing is off...

Read "Reminiscences of a stock operator"... Jesse Livermore entered at market and did not want a good price. But he did want his position to be in the green quickly.

There are certain (volume) requirements for the breakout bar as well as the bar after the breakout which I will talk about in another posting.

Ivo

preflight check

We moved only 21 pips so far which increases chances for a big move later on. I believe chances are very good for a larger move than yesterday. Right now we are trading within yesterday's range.

The daily is in a uptrend. The 5min in a downtrend and below VWAP. Sym pennant on the 5min has just been formed.

Ivo

choppy opening. Shallow downtrend. Will only take FBO's at the (right) trendline. (shorts)

Will take longs only after VE (volatility extension: Blue Left trendline is pushed further away) or after BO to the upside and then wait for point 3 up. Everything else is very tricky.

Ivo

First VE (volatility extension) and then the long...

Ivo

Price goes down after it cannot go up anymore... (trendline a)
Shorted at the second fbo, closed just now. Move looks similar to yesterday's.

There should be some nice (short) opportunities around trendline b..

The question is will it continue to trend down..on a Friday afternoon. The statistics say no. On the daily / hourly there's support + we did have a volatility expansion.

Ivo

BO of shallow channel.

These are the options.
We should at least see an attempt for a point 3 up.

This one is high opportunity and low risk... all conditions met

1. High volume period... (+500 ticks per 5 minutes)
2. AFTER the news
3. above and away from VWAP
4. We were having an upday
5. low volume.. after peaking volume
6. lower volume breakout bar ends at the high.

Interesting day... daily is about to breakout of a sym pennant and trendline... Bullish sentiment.

Interesting start of day.

1. downchannel on the 5min.
2. quick volatility extension... at -1SD of the VWAP
3. followed by breakout of right trendline on normal volume, crossing VWAP. Ideal long entry.
4. price stayed outside of channel.. valid breakout
5. after 5 bars up in a row...and price well above +2SD we are still awaiting point 2... after that point 3 up...

Ivo

I believe for it to be one of those trending days, where price just goes up and up and up (so I hold and hold and hold)... we should have moved already. (we had 4 attempts..). So sold my positions. Just don't see it going up for hours and hours more, but I could be wrong. Volume has been increasing..why doesn't price go up?

Looking for price to go back to VWAP now, possibly making a 1-2-3 down.

Ivo

After hours of triangle we broke out of it after the news.

News is not just the news..but also a starting signal for traders to place their trades; to do whatever they already intended to do anyway. News is always explained (perspective) within the current sentiment...not the other way around. (Fox news condemned Obama for wanting to talk to North Korea but praised Trump for it: It's all about context, perspective, confirmation, reaction). People see what they want to see regardless of what happens. News = participation = larger trends.

The sequence is 1-2-3... we broke out of a upchannel (in red) and wait for a point 3 down after BO which then also forms a pt3 down on the larger channel (in black). Price will always at least make an attempt and if we are quick to recognize we can capitalize on the attempt and stay in if we're correct, or get out (with a small profit) if we're wrong.

However... it's choppy now. Lunchtime. Typically the shallow trendline will be tested or price will hang around there for a while. If we breakout of it (up), the next target is then the VWAP (in lightblue). If that one breaks, the trend is up.

Price respected the shallow trendline and made a VE (volatility extension) without even retracing one bar....

Normally a BO and 8 bars same color means we will get another point 3 down.

Ivo