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Roadmap - A Way To Read Markets

  • #1,421
  • May 9, 2020 10:04am May 9, 2020 10:04am
Quoting btrfx1
Quoting LauraT
{quote} Hi Here's the annotated chart so I can discuss: {image} Hi Laura, Thks for the reply, i snuck off to bed and decided to do more review work----- very comfortable and warm. At my tender, almost 80 yrs of age, they are two basic elements to a comfortable life style, however I remember my January days in Motherwell where getting out of bed at 7:00am was a real challenge hahahaha I would be happy to show you some of my work, hopefully I learnt a few tricks over the last twenty years of trading, mind you I am not
...
No problem, feel free to message me

I bet you don't miss Scottish Januarys!
  • #1,422
  • May 9, 2020 10:32am May 9, 2020 10:32am
Quoting LauraT
{quote} Hi Here's the annotated chart so I can discuss: {image} The way I'm trying to operate the thread at the moment is to only post trades that are either sub-optimal or contain some learning element that others can hopefully benefit from. I don't use indicators other than what's on show. What did you have in mind that told you NU was running out of steam? Here's how I see it: 1. Stretched momentum. A good opportunity to exit (I frequently say that exiting on a spike in your favour is a good plan as spikes tend to reverse). However, my...
Didn't realize there are so many subtle nuances in that exit. I guess it takes a lot of screen time to monitor and absorb each of these smaller changes across multiple trades / chart and to do that constantly every minute or so, that is incredible and need lot of focus to detail. Don't know how you do that day in day out
  • #1,423
  • May 9, 2020 10:49am May 9, 2020 10:49am
Quoting karun
{quote} Didn't realize there are so many subtle nuances in that exit. I guess it takes a lot of screen time to monitor and absorb each of these smaller changes across multiple trades / chart and to do that constantly every minute or so, that is incredible and need lot of focus to detail. Don't know how you do that day in day out
You'll get there

One thing I haven't really discussed yet on this thread is basic market structure (and by basic, I mean very basic). I'll try to remedy that soon.
  • #1,424
  • May 9, 2020 11:48am May 9, 2020 11:48am
Quoting LauraT
{quote} You'll get there One thing I haven't really discussed yet on this thread is basic market structure (and by basic, I mean very basic). I'll try to remedy that soon.
Hey Laura,
Thanks for reminding us about the lower highs, lower lows bit, easy how the basics get forgotten!

Please do discuss basics when you're able, I certainly need reminding of them. Sometimes it's these subtle nuances that can make up the whole method .......

Tony
  • #1,425
  • May 9, 2020 11:49am May 9, 2020 11:49am
Quoting LauraT
{quote} Hi Here's the annotated chart so I can discuss: {image} The way I'm trying to operate the thread at the moment is to only post trades that are either sub-optimal or contain some learning element that others can hopefully benefit from. I don't use indicators other than what's on show. What did you have in mind that told you NU was running out of steam? Here's how I see it: 1. Stretched momentum. A good opportunity to exit (I frequently say that exiting on a spike in your favour is a good plan as spikes tend to reverse). However, my...
Thanks for the annotated chart, you're an excellent teacher !
I have 10k+ hours of chart time, but am still learning new things every day

LuXing
Wisdom begins in wonder
  • #1,426
  • May 9, 2020 1:04pm May 9, 2020 1:04pm
Basic Market Structure/Phases (Overview)

As I haven't covered it yet, and I'm guilty of assuming people understand it, I want to issue a quick refresher course on very basic market structure. This really is just scratching the surface of different market phases but it will hopefully serve as helpful to someone.

Phase 1 - Rotation (Ranging)

This market phase could warrant a page of discussion all on its own but let's just very simply define what a market in rotation is doing. As per the chart example below, price action is choppy and is easily confined within a box (or range):

Attached Image (click to enlarge)
Click to Enlarge Name: rotation.png Size: 32 KB


Phase 2 - Trends (and Reversals)

Put simply, an uptrend is a series of higher highs and higher lows whereas a downtrend is a sequence of lower highs and lower lows. If you look at the chart example below, you will see the climax of a downtrend followed by the beginning of an uptrend. I have marked the point of reversal with a red line. The thicker red line simply shows the new uptrend continuing.

Attached Image (click to enlarge)
Click to Enlarge Name: reversal_trend.png Size: 30 KB


Phase 3 - Consolidation (Compression)

In basic terms, a consolidating market phase means the volatility range is decreasing (the highs are becoming lower and the lows are becoming higher). Imagine holding a spring between your thumb and finger and applying pressure. The spring compresses. Just like a compressed spring, the next action is expansion when the pressure is released. Compressed markets will, eventually, expand and the narrow range they've created will be broken, often with great force.

The chart example below shows a consolidating market:

Attached Image (click to enlarge)
Click to Enlarge Name: consolidation.png Size: 37 KB


As I said, these really just serve as an introduction to what can be a very nuanced topic. In a future post I will endeavour to set out how we, as roadmap traders, should approach these market phases.
  • #1,427
  • May 9, 2020 1:42pm May 9, 2020 1:42pm
Quoting LauraT
{quote} Hi - thanks for working through the thread and for your kind words The only thing we really need to be aware of with the ADR figures is how much of the range it has completed today. That gives an indication as to whether there is much more 'juice' in the tank for further moves. Hope this helps.
Dear Laura,

Thanks for the previous post vey clear and to the point. I have finally finished reading the whole thread , Hanover's thread and your journal.

All are very insightful.

After reading the whole thread, I have one question regarding ADR values (top left corner of the chart) as mentioned in the quoted post by me above,

From the thread I can gather that (for currency trades) :

1. If ADR Value is > 100 then it is good to trading currencies pair in M1 time frame
2. IF ADR Value is < 100 then it is better to look at higher time frames like M5 and M15.

I wanted to check, are there any other insights that we can look at from ADR value or just the above two points are the most actionable insights.

Thanks in anticipation.
  • #1,428
  • May 9, 2020 1:54pm May 9, 2020 1:54pm
Quoting Nishith
{quote} Dear Laura, Thanks for the previous post vey clear and to the point. I have finally finished reading the whole thread , Hanover's thread and your journal. All are very insightful. After reading the whole thread, I have one question regarding ADR values (top left corner of the chart) as mentioned in the quoted post by me above, From the thread I can gather that (for currency trades) : 1. If ADR Value is > 100 then it is good to trading currencies pair in M1 time frame 2. IF ADR Value is < 100 then it is better to look at higher time frames...
Congratulations on getting to the end of the thread

The guidance on ADR being over/under 100 was primarily because I was concerned that people were headed straight to 1m charts. You can happily trade all currencies on M5, M15, H1 etc etc but not all currencies are suitable for M1 trading.

In terms of other insights, not really. The main purpose of ADR is for us to know how much of a range has been completed and therefore what the remaining volatility might be.
  • #1,429
  • May 10, 2020 1:45am May 10, 2020 1:45am
Quoting LauraT
{quote} Congratulations on getting to the end of the thread The guidance on ADR being over/under 100 was primarily because I was concerned that people were headed straight to 1m charts. You can happily trade all currencies on M5, M15, H1 etc etc but not all currencies are suitable for M1 trading. In terms of other insights, not really. The main purpose of ADR is for us to know how much of a range has been completed and therefore what the remaining volatility might be.
Thanks for the new tutorials.

Waiting for more on the currencies that are not suitable for the one minute chart, please
  • #1,430
  • May 10, 2020 4:51am May 10, 2020 4:51am
Quoting Ican2020
{quote} Thanks for the new tutorials. Waiting for more on the currencies that are not suitable for the one minute chart, please
Hi

It's a matter of personal preference in the end.

I would advise you not to trade pairs with an ADR of less than 100 on the 1m timeframe but it really has to be an individual choice. Have a look at the charts for a particular pair you are interested in and see what's workable.

We also all have different styles and targets. Some are scalpers looking for 5-10 pips, in which case the 1m might be viable, whereas others are position/swing traders looking for bigger moves and will require longer term charts.
  • #1,431
  • May 10, 2020 6:06am May 10, 2020 6:06am
Quoting LauraT
{image} Closed a couple of oil shorts after spike in my favour.
Laura, why are both your entries short on the undersaide of the MA Bands? shouldnt they be above?
  • #1,432
  • May 10, 2020 6:18am May 10, 2020 6:18am
Quoting Topgun
{quote} Laura, why are both your entries short on the undersaide of the MA Bands? shouldnt they be above?
Hi

Well spotted. Put simply, they were impatient entries. Ideally, price should be inside the channel (doesn't have to be above).
  • #1,433
  • May 10, 2020 9:59am May 10, 2020 9:59am
CompRSISelectv2 repaints or it seems to me? the tester shows that repaints...
  • #1,434
  • May 10, 2020 8:06pm May 10, 2020 8:06pm
H4 training
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot_20200510-220440.jpg Size: 172 KB
Click to Enlarge Name: Screenshot_20200510-220455.jpg Size: 183 KB
MTN
  • #1,435
  • May 10, 2020 8:31pm May 10, 2020 8:31pm
Quoting ak01
CompRSISelectv2 repaints or it seems to me? the tester shows that repaints...
I wrote a similar Composite RSI indicator for Neilsdigest's strategy, and it also had repainting issues. More info from this post onward. It seems that this might be an issue with MTF indicators generally, as explained here.
  • #1,436
  • May 10, 2020 9:50pm May 10, 2020 9:50pm
Quoting Marcelomtn
H4 training {image} {image}
just asking, but is this even the same strategy?
  • #1,437
  • May 10, 2020 10:04pm May 10, 2020 10:04pm
Quoting tradeChaser
{quote} just asking, but is this even the same strategy?
It might be, check post 449. Also I am doing what i was told on post 551.
MTN
  • #1,438
  • May 11, 2020 1:23am May 11, 2020 1:23am
It's interesting because I developed almost the same system that you have but it's not able to be automated so I dropped it.
  • #1,439
  • May 11, 2020 3:19am May 11, 2020 3:19am
Quoting Marcelomtn
H4 training {image} {image}
Is there a 200 moving average in there somewhere?
every Saint has a past. Every Sinner has a Future
  • #1,440
  • May 11, 2020 3:27am May 11, 2020 3:27am
Quoting ak01
CompRSISelectv2 repaints or it seems to me? the tester shows that repaints...
Yes i agree, it is repainting. I have reduced the settings to 15min and 5min, still repaints and slows down the platform. It appears to repaint in candle sequences of lower timeframe divided into higher timeframe. (15-5=3 + 60-15=4) On the SPX500 at 9.25AM UK it alters every 6candles on the 15/5 setting on 1min chart
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