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Trading with Price Action - Daily Trading Analysis 80 replies

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Trading the Daily

Great idea bobokus! I look forward to following your thread!
Quoting Bobokus
I have confidence in you, get some sleep first.

Thexder must have already slept, since he told me he sleeps on Wednesdays and Saturdays.

Thanks Bo for the Daily. With both you guys working on this... it should be very powerful.
Quoting Thexder
Before I sleep here's one thing I saw when I pulled up a chart and looked at a random spot. If this fib were part of a retracement or the start of a new down move (I didn't look long term to see how it fits in), then the pull back upward retraces to the inner fibs within an upward range that becomes clear as time goes on.

There's lots of high and low candle breaks as one clue to the range period. When clear boundary lines can be drawn, a break of the range coinciding with fib levels may be a good time to get in.

In this case the range is broken to the down side on the circled candle, and this coincides with a 38.2 bounce. Taking the break of the low and trailing the stop behind the candles gives a good move. There's lots of penetrations and bounces in & around the fib levels but once the noise clears up, the true fib bounce/break is seen.
Hey Thex,

Sorry but what do you mean by high and low candle breaks?

Thanks
Quoting disr
what do you mean by high and low candle breaks?
The extreme high and low of adjacent candles are being broken (surpassed) in the up & down directions without really progressing anywhere over time - the net effect of the higher and lower candles is a sideways range.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Hi Bo and everyone,
I have been a long time student/lurker of your other thread after following Skunny thread all along. I have even re-traded the first month of your thread on Vhands, reading your comments "live" afterwards. It's a great technic and you're a great teacher and I learned a lot.
I tried to adapt the technic to the daily for the same reasons that everybody here (I live on the west coast of Canada and I'm not far to get sick if I don't allow myself a little more sleep) but I was put off by the huge range, so I devised a method for H4 which I backtested on GU from April to Dec 06, about 9 months and the results are quite encouraging : profit 8100pips 40 winners and 7 loosers (82%), max drawdown 370 pips and I was discovering the technic to apply as I was going so there was more loosers in the beginning. I used 3 lots for each trade, with progressive TP and SL...
The interesting thing is that in H4 the intraday becomes the intraweek and the swing fib is of the same range than the intraday... but I didn't used them exactly the same way...
Trading H4 is a lot about learning not to trade, because some ranging situations can last more than one week, the trades can last up to that much too. (those ranging to avoid in H4 would have been probably fine to trade in M15...)
With this in mind I can gess that the scale for daily will be the Intra-month with trades lasting for few weeks to more than a month and periods over a month without a trade.
Anyway I'm going to read your documents and report.
Actually I wouldn't mind trading side by side the daily, the H4, and when I can the H1 or more realistically with my schedule, Islander's M15/M5.
millions of pips to you.
I would be interested to compare the average amount of pip you can make for the same period in H1 versus H4 or Daily. In the thread somewhere, you wrote it was something like for time as much in H1 than in Daily, do you think it's a realistic figure?
Schmurex
PS can somebody direct me to the link for the video, I didn't see the last one.
Quoting schmurex
I backtested on GU from April to Dec 06, about 9 months and the results are quite encouraging : profit 8100pips 40 winners and 7 loosers (82%), max drawdown 370 pips
Is that the number of pips from beginning to end of a certain trade range, or is that counting each of the 3 lots as a separate pip count?
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Quoting Thexder
Is that the number of pips from beginning to end of a certain trade range, or is that counting each of the 3 lots as a separate pip count?
Hi Thexder,
I don't get your question (english is not my first language), I'll try to explain better what I mean and if it doesn't answer your question, please ask again.
At each trade opportunity I opened 3 lots with the same entry, the first one with TP 1 which in some case was as little as 30 or 50 pips to get something in case the trade turned sour, the second one with the next TP (usually I had moved the fibs in between and modified the TP if not reached yet) and the third one left to run as far as it could.
So for each trade I considered the total result of the 3 lots : 47trades of 3 lots each, ranging from worse case -369 to best case + 832 for a total over the 9 months of backtest of over 8100.
If you have a look to the chart you'll see that the pair had a lot of whipsaw during that period and a lot of diverse market conditions. I picked up the start randomly because it was as far as vhand could go in H4.
Hope this helps
Schmurex
Quoting schmurex
So for each trade I considered the total result of the 3 lots : 47trades of 3 lots each, ranging from worse case -369 to best case + 832 for a total over the 9 months of backtest of over 8100.
I'm still not sure I got it, but here's an example...
A trade is taken long at 2.0000 with 3 lots.
First lot is sold for +50 at 2.0050
Second lot is sold for +100 at 2.0100
Third lot rides until finally stopped for +200 at 2.0200

So the range of price was 200 pips from 2.0000 to 2.0200
But between 3 lots there was a pip gain of 50 + 100 + 200 = 350

So is 8100 calculated based on my example of all 3 lots gain of 350 or just the price range of the trade for 200?
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Quoting Thexder
I'm still not sure I got it, but here's an example...
A trade is taken long at 2.0000 with 3 lots.
First lot is sold for +50 at 2.0050
Second lot is sold for +100 at 2.0100
Third lot rides until finally stopped for +200 at 2.0200

So the range of price was 200 pips from 2.0000 to 2.0200
But between 3 lots there was a pip gain of 50 + 100 + 200 = 350

So is 8100 calculated based on my example of all 3 lots gain of 350 or just the price range of the trade for 200?
Yes 8100 is calculated based on your example of all 3 lots gain of 350. I feel it makes more sens like this, since we're talking of trading technics and a range is just a potential of which you can pull out what your technic allows you to (it could well be a loss if your SL is too short, for instance).
Schmurex
Quoting schmurex
Yes 8100 is calculated based on your example of all 3 lots gain of 350.
Now I know a little better how to compare that method to just using hourly for the way I trade hourly (which is different and probably less profitable than the main hourly method being taught). I've been averaging around 150 a week for a few months, which I can only hope would hold up in the long term, so that's 600 a month, or 5400 in 9 months (single lots). But I'd rather just say 100 a week and 400 a month as a conservative average, so that's 3600 in 9 months conservative single lots.

I'm always searching for a way to avoid sitting at the screen all night (East coast Canada time zone) with a higher time frame. When I was considering the 4 hour charts I still found myself always needing to watch them. I'm hoping to learn to use daily as a lowest time frame...so I really don't have to monitor it until end of day.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Quoting Thexder
Now I know a little better how to compare that method to just using hourly for the way I trade hourly (which is different and probably less profitable than the main hourly method being taught). I've been averaging around 150 a week for a few months, which I can only hope would hold up in the long term, so that's 600 a month, or 5400 in 9 months (single lots). But I'd rather just say 100 a week and 400 a month as a conservative average, so that's 3600 in 9 months conservative single lots.

I'm always searching for a way to avoid sitting at the screen all night (East coast Canada time zone) with a higher time frame. When I was considering the 4 hour charts I still found myself always needing to watch them. I'm hoping to learn to use daily as a lowest time frame...so I really don't have to monitor it until end of day.
Thank you for your reply. It gives me something to compare with. So my 4H result is not too bad. But it's only a limited backtest. I'm going to demo trade it on UJ and GU for some time. Having a look every 4 hours sounds like hollidays compared to H1 (in my backtest I choosed the option of having only the candles opening).
But I hope to be able to trade the daily as well.
Schmurex
Quoting schmurex
Having a look every 4 hours sounds like hollidays compared to H1
Were you looking at every candle in the day or just certain time of day? With hourly I only take trades from 12am to 12pm EST and after a "big" move has occurred in the day, I don't usually do anything further, so sometimes I could be done the day within a few hours and not have to sit too long.
I even have a concern about using daily candles - if I have to be there to check at the start of each one, that would be early evening for me and as bad as it sounds, that could interfere with the very freedom that daily charts would give. If I wanted to be away from home out doing something, I would suddenly need internet access at 6pm or 5pm. Too bad it's not midnight.

I guess there's always iphone or blackberry...but I'm getting ahead of myself!
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Quoting Thexder
Were you looking at every candle in the day or just certain time of day? With hourly I only take trades from 12am to 12pm EST and after a "big" move has occurred in the day, I don't usually do anything further, so sometimes I could be done the day within a few hours and not have to sit too long.
I even have a concern about using daily candles - if I have to be there to check at the start of each one, that would be early evening for me and as bad as it sounds, that could interfere with the very freedom that daily charts would give. If I wanted to be away from home out doing something, I would suddenly need internet access at 6pm or 5pm. Too bad it's not midnight.

I guess there's always iphone or blackberry...but I'm getting ahead of myself!
I am a bit confused...
Do you sit the whole day in front of your pc?
Or only a few times a day?
Quoting derrekmay
I am a bit confused...
Do you sit the whole day in front of your pc?
Or only a few times a day?
The trading day occurs at night for me so depending what's happening I might only need to check just before each new hour, or if something is pending I might need to watch it constantly until it plays out.

And even when I'm watching it constantly I"m not tied to a computer/desk, I can observe the charts on a laptop while doing something else anywhere in the house.

I also rarely need to be around for the whole trading session because I'll either get a good trade within a few hours, or after so long I'll call it a day because nothing is happening (ranging) and looking for a setup is always bad news if it isn't jumping out.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
Quoting Thexder
Were you looking at every candle in the day or just certain time of day? With hourly I only take trades from 12am to 12pm EST and after a "big" move has occurred in the day, I don't usually do anything further, so sometimes I could be done the day within a few hours and not have to sit too long.
I even have a concern about using daily candles - if I have to be there to check at the start of each one, that would be early evening for me and as bad as it sounds, that could interfere with the very freedom that daily charts would give. If I wanted to be away from home out doing something, I would suddenly need internet access at 6pm or 5pm. Too bad it's not midnight.

I guess there's always iphone or blackberry...but I'm getting ahead of myself!
I was using each 4hour candle, but taking notice of the 12:00 noon GMT one I would likely sleep through since it's 4:00 am my time.
For you the best way might be to open a demo with a MT4 broker starting his day at the right time for you and trade with your favorite broker.
Quoting schmurex
Hi Bo and everyone,
I have been a long time student/lurker of your other thread after following Skunny thread all along. I have even re-traded the first month of your thread on Vhands, reading your comments "live" afterwards. It's a great technic and you're a great teacher and I learned a lot.
I tried to adapt the technic to the daily for the same reasons that everybody here (I live on the west coast of Canada and I'm not far to get sick if I don't allow myself a little more sleep) but I was put off by the huge range, so I devised a method for H4 which I backtested on GU from April to Dec 06, about 9 months and the results are quite encouraging : profit 8100pips 40 winners and 7 loosers (82%), max drawdown 370 pips and I was discovering the technic to apply as I was going so there was more loosers in the beginning. I used 3 lots for each trade, with progressive TP and SL...
The interesting thing is that in H4 the intraday becomes the intraweek and the swing fib is of the same range than the intraday... but I didn't used them exactly the same way...
Trading H4 is a lot about learning not to trade, because some ranging situations can last more than one week, the trades can last up to that much too. (those ranging to avoid in H4 would have been probably fine to trade in M15...)
With this in mind I can gess that the scale for daily will be the Intra-month with trades lasting for few weeks to more than a month and periods over a month without a trade.
Anyway I'm going to read your documents and report.
Actually I wouldn't mind trading side by side the daily, the H4, and when I can the H1 or more realistically with my schedule, Islander's M15/M5.
millions of pips to you.
I would be interested to compare the average amount of pip you can make for the same period in H1 versus H4 or Daily. In the thread somewhere, you wrote it was something like for time as much in H1 than in Daily, do you think it's a realistic figure?
Schmurex
PS can somebody direct me to the link for the video, I didn't see the last one.
Very Interesting, You may be of help here as we are trying to make the Daily work for those that are fairly new to trading or just want to trade from the Daily based on their time restrictions, and still use Fibonacci as the basis, its just very hard for someone new to trading to blindly enter thus the need to develope a methodology that can be followed. Ive started with the basics of what may work but we need to explore this over time to assure that it will work over time during the various conditions the markety will progress through.
As far as the amount of pips trading the Daily will not net as many pips as trading intraday. If you have a Daily target that is 400 pips away, trading intraday can usually double this amount since you trade each day getting in and out of the market as price makes it way to the Daily target.
All the video's of mine are posted in the 1st post of my Trading Fibonacci thread.
Just to get things started, Ive set a sell stop below Sundays low and it has been picked up and the Stop almost hit already. Its early to jump in since the market has been ranging but i would like to see losses as well as winners to help make decisions on how to handle them. 1 solution is to monitor the 4hour and the 1 hour when making the decision the enter each day as you make your analysis and set the entry and stop points. I was going to wait until we had some direction but the management of losses is also as important as letting the winners run, so all options must be explored.
Comparing the waveforms developing from the 4 hour and 1 hour I think will help as we make our analysis each day.

For this entry I set the Stop 8pips above the high made back on 2/27(1.9978), and the Sell stop @ (1.9832). Looking at the last few days from the Daily, support levels from the fib measuring this last leg up price made are holding and pushes are being made to attempt a break on this previous high but each time the high is lower until today that was quickly turned away.
The Stoch is rolling over but cant be trusted yet as price is not agreeing.
At the close today and open of the next Daily candle, I may adjust the stoploss since price has yet to pentrate very decisively the support levels of the this last move up yet, hinting they may not be done yet with the pushes up. Ideally we would like to see price retreat some into the levels of this fib just enough to bring the stop loss down closer to price.
In the next post we'll look at the 4hour and 1 hour to help with our decisions.
Ive aslo posted a template of the Daily as seen here so anyone that wishes to help develope this Daily strategy your more than welcome here, problem is we do not want to weigh it down with indicators as it will confuse the set up. The basics work best in the long run.
Attached Image (click to enlarge)
Click to Enlarge Name: trade1.gif Size: 27 KB
Attached File
File Type: tpl dailyexample.tpl   6 KB | 347 downloads
The 4hour chart the Stoch is rolling up indicating we could see some retracement back up into todays Intraday levels even a test at the high again. From the 4 hour the bounces from this same fib are more clear now since price movement is broken down some by the smaller timeframe.
The action on the 4hour candles indicate a slow trickling down, and a move up could be soon.
The 1 hour Ive slowed the Stoch down to 8,3,3 and it appears to be headed for a bottom giving the same indication as the 4 hour, that we could see retracement into todays Intraday levels.The action on the 1 hour candles over the past few days indicate simply ranging. The highs and lows of the past 3 days will need to be broken before another direction is clear.
But since we are trading the Daily we just need to be prepared that price will move against the trade initially, a lower close today might be a good sign. Good idea is to check the next couple of days for news announcments to see where they may push price next since price moves prior to the announcements.(pricing in the next economic numbers)
The 4hour and 1 hour charts are the same chart as the Daily just zoomed in to each level to get the analysis.
Attached Images (click to enlarge)
Click to Enlarge Name: trade14hour.gif Size: 22 KB Click to Enlarge Name: trade1_1hour.gif Size: 24 KB
Quoting Bobokus
Just to get things started, Ive set a sell stop below Sundays low and it has been picked up and the Stop almost hit already. Its early to jump in since the market has been ranging but i would like to see losses as well as winners to help make decisions on how to handle them. 1 solution is to monitor the 4hour and the 1 hour when making the decision the enter each day as you make your analysis and set the entry and stop points. I was going to wait until we had some direction but the management of losses is also as important as letting the winners run, so all options must be explored.
Comparing the waveforms developing from the 4 hour and 1 hour I think will help as we make our analysis each day.

For this entry I set the Stop 8pips above the high made back on 2/27(1.9978), and the Sell stop @ (1.9832). Looking at the last few days from the Daily, support levels from the fib measuring this last leg up price made are holding and pushes are being made to attempt a break on this previous high but each time the high is lower until today that was quickly turned away.
The Stoch is rolling over but cant be trusted yet as price is not agreeing.
At the close today and open of the next Daily candle, I may adjust the stoploss since price has yet to pentrate very decisively the support levels of the this last move up yet, hinting they may not be done yet with the pushes up. Ideally we would like to see price retreat some into the levels of this fib just enough to bring the stop loss down closer to price.
In the next post we'll look at the 4hour and 1 hour to help with our decisions.
Ive aslo posted a template of the Daily as seen here so anyone that wishes to help develope this Daily strategy your more than welcome here, problem is we do not want to weigh it down with indicators as it will confuse the set up. The basics work best in the long run.
Bo,

I am using Alpari UK mt4 charting and even though it is metastock the daily candles print differently, enough it would appear , to be a problem. For instance the wick and body lengths are not of the same on both charts. Plus the candle count from the low of 9361 on 2/20 to the high of 9970 on 2/27 is different. Due to the counting or not of Sunday.

Another example.. On Alpari the 1/30 and 1/31 candles are both doji s .

Just something to throw out there for others who might not see the same candles as in your examples.

Lou
Quoting Lou
even though it is metastock the daily candles print differently, enough it would appear , to be a problem.
I have the same problem with the demo MT4 feed on my main system and laptop. I downloaded both times from the same metaquotes site link and applied for a demo account but one chart has sunday bars and lags an hour, and overall the candles form differently. Yesterday I had one chart showing a lower high and the other a higher high. I don't seem to have much control over choosing the demo feed, I might have to just keep re-applying for accounts until I get a match.

In the end I just use those feeds as a guide and when it's time to make a trade I'll go with the demo chart formations, then take the numbers on my own broker's feed at the last minute since that's what I'm ultimately trading against. If my broker shows an S/R level different from MT4, I'll go with my broker.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
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