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Rally - Accumulation - Rally

  • #1
  • First Post: Dec 6, 2019 9:51am Dec 6, 2019 9:51am
Hello to everybody, this is my first thread started here on FF. I'm writing here because I started to notice on lower TF like 1hour or less, that there is a kind of structure like Rally-Accumulation-Rally (I uploaded a picture of today, but I can provide more of this kind).

So the things I noticed is that after a really, really sharp movement. The price come back to the start location, and I'm not talking about S&D because I don't trade "the bounce" on that level, but I trade the exit from the consolidation/accumulation BOX (see the screenshot).

So exit from box -----> reach of the start of sharp movement.

I know that I'm not the first, and I'm not the only that saw this.
But I didn't find anything about it, no thread or theorical material. So I end up to open this thread hoping to create something useful.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: download (1).png Size: 68 KB
Click to Enlarge Name: download (2).png Size: 68 KB
"In ancient times they had no statistics so they had to fall back on lies."
  • #2
  • Dec 6, 2019 11:37am Dec 6, 2019 11:37am
Quoting Naustromo
Hello to everybody, this is my first thread started here on FF. I'm writing here because I started to notice on lower TF like 1hour or less, that there is a kind of structure like Rally-Accumulation-Rally (I uploaded a picture of today, but I can provide more of this kind). So the things I noticed is that after a really, really sharp movement. The price come back to the start location, and I'm not talking about S&D because I don't trade "the bounce" on that level, but I trade the exit from the consolidation/accumulation BOX (see the screenshot)....
IMO it has potential but sometimes the consolidation lasts very long. consider spending hours or even DAYS in front of a chart, waiting for the breakout to occur...

I tried automating it and it produced amazing results till 2018, then low volatility came and the system is in DD since then... I had to discard it.
  • #3
  • Dec 6, 2019 11:48am Dec 6, 2019 11:48am
Quoting HeyYou
{quote} IMO it has potential but sometimes the consolidation lasts very long. consider spending hours or even DAYS in front of a chart, waiting for the breakout to occur... I tried automating it and it produced amazing results till 2018, then low volatility came and the system is in DD since then... I had to discard it.
First of all, thanks for your post .
Well this is not a method or something, I just wanted to start discussing it and then who know .

BTW the first thing that I noticed about that is:
1- Trying to identify the box
2- Put a limit order in the opposite direction of the trade, example:
Target is short, I will put a Sell Limit on the upper side of the box.
Target is long, I will put a Buy Limit on the lower side of the box.

Obviously this won't guarantee that your order will be filled, but in that case I think you will have the best R:R . (These are only ideas )

And did you stop to use this kind of automatic trading?
"In ancient times they had no statistics so they had to fall back on lies."
  • #4
  • Dec 6, 2019 12:49pm Dec 6, 2019 12:49pm
if you are interested, I looked for a BB squeeze to identify the consolidation.
  • #5
  • Dec 6, 2019 1:07pm Dec 6, 2019 1:07pm
Quoting HeyYou
if you are interested, I looked for a BB squeeze to identify the consolidation.
Yes if we talk about the indicator way, the BB squeeze are very good. But I left the indicator world months ago and now only naked charts for me
"In ancient times they had no statistics so they had to fall back on lies."
  • #6
  • Dec 6, 2019 1:21pm Dec 6, 2019 1:21pm
Quoting Naustromo
{quote} Yes if we talk about the indicator way, the BB squeeze are very good. But I left the indicator world months ago and now only naked charts for me
Me too .
  • #7
  • Dec 6, 2019 1:42pm Dec 6, 2019 1:42pm
I will add a simple screen from EUR/USD 1h:
- When the sharp movement is identified, we observe the price for the (1), (2).
- (1), (2) are the first 2 points to develop the box (rectangle). It give to us the upper and lower bound.

#Example:
In the first box we got an upper inversion (1), a lower inversion (2). So in that moment we got the TEMPORARY bounds.
I'm saying temporary because the price can make new bounds.
So at the point (2), we have an upper bound, and we COULD place a Sell Limit order at the same price of (1).

I know that watching charts of the past is always simple and I even tried this yet, maybe I'll try with some software that "replays" the charts.

I thought a second method but it doesn't seem good as the last one: Wait the price leaving the box, and place a limit order on the broke bound waiting for a retracement.
But usually the retracement could has a lot of momentum and this means ----> Bigger SL ------> Less R:R.

Last thing that I noticed, if the price movement is not so sharp, after the accumulation/consolidation, we can have a breakout in the opposite way.
So our eyes must choose wisely.
Attached Image (click to enlarge)
Click to Enlarge Name: download (3).png Size: 68 KB
"In ancient times they had no statistics so they had to fall back on lies."
  • #8
  • Dec 7, 2019 1:00pm Dec 7, 2019 1:00pm
You can actually focus a bit more on this. What you're seeing isn't patterns of accumulation and rallys...
you're actually seeing price objectively displaying uncertainty.

You can only make a play on one candle (your trade).

What you're seeing is how often the rewards and ,risks are for holding such and such per direction choice, and as you can probably tell...
There's not a lot of those big rally rewards. There's a whole lot of little to none. An uneven distribution for the majority of the time you may enter a trade and you're not doing anything about it. I say may because you're most likely to fall into the pitfalls of such and such, and aren't aware of it. If you didn't book the little to none opportunities, chances are market already shifting its directions to press against your losses additionally adding onto the spread.
It all boils down to a simple question really. How can I book small rewards, while giving myself an opportunity for big ones? As you can see, it's pretty hard to answer systemically, at least in a mechanical sense. But if you copy how a bank does it, it's quite simple.
  • #9
  • Dec 7, 2019 1:20pm Dec 7, 2019 1:20pm
Quoting Swisse
You can actually focus a bit more on this. What you're seeing isn't patterns of accumulation and rallys... you're actually seeing price objectively displaying uncertainty. You can only make a play on one candle (your trade). What you're seeing is how often the rewards and ,risks are for holding such and such per direction choice, and as you can probably tell... There's not a lot of those big rally rewards. There's a whole lot of little to none. An uneven distribution for the majority of the...
First of all thanks for your post ☺.
Well you probably are right, the reason that push me to open this thread is that in the last few days I'm trying to read all the threads about "order flow", "Market makers movement" and go on.
So when I saw these kind of movement that often appears, I quickly tried to connect the dots .
But I know that is not so simple, I only found pieces of advanced concept of market structure theory, but at the moment I don't know where to start studying.
So I opened this thread to see if there are other people that are into this .

I started to be profitable months ago just controlling my emotions, but without this kind of knowledge it's seem to me that I'm trading ""blindly""
"In ancient times they had no statistics so they had to fall back on lies."
  • #10
  • Dec 7, 2019 1:56pm Dec 7, 2019 1:56pm
Quoting HeyYou
{quote} Me too .
If you don't mind, can you share the ea which you used in 2018?
  • #11
  • Dec 7, 2019 2:29pm Dec 7, 2019 2:29pm
Quoting Kkptra
{quote} If you don't mind, can you share the ea which you used in 2018?
No

but I can share the logic behind it..

I talked about it here: https://www.forexfactory.com/showthread.php?t=760964

and as you see I was very enthusiastic but as I said... it doesn't work with low volatility.

maybe I'm missing something ?

anyways...
if bb up-bb down <x points
place two stop orders x points away from the previous close (or bb main)

it's really that simple.. and don't worry, it is easy to code.
  • #12
  • Last Post: Oct 19, 2023 7:39am Oct 19, 2023 7:39am
Quoting Swisse
It all boils down to a simple question really. How can I book small rewards, while giving myself an opportunity for big ones? As you can see, it's pretty hard to answer systemically, at least in a mechanical sense. But if you copy how a bank does it, it's quite simple.
Any hints how the banks does it?
On the way
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