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Igrok Method. Q's & A's. Comments, thoughts and ideas

  • #81
  • Mar 22, 2007 6:59pm Mar 22, 2007 6:59pm
Quoting Igrok
1. On my charts the open of the day and the high before the news came out are different prices. The difference was not that big but it existed. The market was trading above the open price.
2. The delay was caused by the obvious reason. The market was expecting a news scheduled for a particular time.
3. The change in the direction of the main move of the day just three hours before the end of the day and with 30 pips intraday range plus on a major news release practically guarantees the extension at least into ATR. Like shooting a fish in a barrell.

Igrok,

First of all I want to say its an absolute pleasure to be able to discuss forex with you. Totally enjoyed Beat the odds
Just a quick question. Im in Australia so please excuse any time differences. The chart below is in GMT time though.
If this is a Box 18.1, am i to say my correct trade would be
Enter short at 1.3381 (somewhere between 6:30-6:45GMT)
Stop and reverse @ say 1.3415
And i thought P1 (30-40 pips) because its against the medium term trend
Is this right?
Attached Image
  • #82
  • Edited 7:36pm Mar 22, 2007 7:20pm | Edited 7:36pm
Quoting Blackinc
Igrok,

First of all I want to say its an absolute pleasure to be able to discuss forex with you. Totally enjoyed Beat the odds
Just a quick question. Im in Australia so please excuse any time differences. The chart below is in GMT time though.
If this is a Box 18.1, am i to say my correct trade would be
Enter short at 1.3381 (somewhere between 6:30-6:45GMT)
Stop and reverse @ say 1.3415
And i thought P1 (30-40 pips) because its against the medium term trend
Is this right?
The idea is generally correct. However when I start looking for a trading opportunity I usually explore several options before making a decision. There is always several potentials exist and it makes sense to try to chose the best one. So, I usually look for the safest and the most obvious opportunity. From my point of view the best choice yesterday among majors was going long on USD/CHF at around 1.2100 with stops below 1.2075 when it made a correction after posting an intraday high at 1.2140. This strategy is described in the template #18.4, which is usually my first choice for intraday trading. Besides, taking this trade on USD/CHF would be also in the direction of the main move of the week.
  • #83
  • Mar 22, 2007 7:43pm Mar 22, 2007 7:43pm
Quoting Igrok
taking this trade on USD/CHF would be also in the direction of the main move of the week.

Ah yes,

I'm still getting my head around 18.4, but i can see what you mean with the CHF. The only question there is the medium term trend as you have stated before is short. Still you were comfortable going long because this looks like the direction of the week?

Cheers,
  • #84
  • Mar 22, 2007 7:54pm Mar 22, 2007 7:54pm
Quoting Blackinc
Ah yes,

I'm still getting my head around 18.4, but i can see what you mean with the CHF. The only question there is the medium term trend as you have stated before is short. Still you were comfortable going long because this looks like the direction of the week?

Cheers,
It was not the only reason but one of them.
  • #85
  • Mar 23, 2007 2:51am Mar 23, 2007 2:51am
Quoting Igrok
Timing is not something carved in the stone, while the formations are usually reliable enough.
This is a bit confusing. In your book, you are sometimes quite specific re. the timing. Could you please elaborate on this topic - in what circumstances should we pay more or less attention to the timeline?
sans peur et sans reproche
  • #86
  • Mar 23, 2007 4:00am Mar 23, 2007 4:00am
Quoting ilanr
This is a bit confusing. In your book, you are sometimes quite specific re. the timing. Could you please elaborate on this topic - in what circumstances should we pay more or less attention to the timeline?
Shouldn't be confusing at all. Check out chapter 16, pages 133-140. It is all explained there.
  • #87
  • Mar 23, 2007 4:01am Mar 23, 2007 4:01am
Quoting Igrok
The entire day today on Cable was almost the exact replication of the first half of the previous day before the news has spooked the market.
GBPUSD seems to draw the same picture for the third day in a raw. Question: if we are confident that this is a 19.1, why don't we sell when the price reaches, say, 30 p. above the Asian range?
sans peur et sans reproche
  • #88
  • Mar 23, 2007 4:22am Mar 23, 2007 4:22am
Quoting ilanr
GBPUSD seems to draw the same picture for the third day in a raw. Question: if we are confident that this is a 19.1, why don't we sell when the price reaches, say, 30 p. above the Asian range?
It is not the same. Or might become different some time later in the day. If you are to anticipate patterns rather then to see them, you will be in trouble soon. Could be the same mistake as the guys were anticipating H&S on the EUR/USD in one of the topics we have already discussed here. Would you, please, remind me what happened to that "picture-perfect bearish H&S" that they were cheering for in advance?
Besides, when I trade, I start my plan from defining a particular level for stops and only then look for an opportunity to take an actual position. I don't see any reliable level for stops if to sell Cable on today's uptick.
  • #89
  • Mar 23, 2007 4:53am Mar 23, 2007 4:53am
Quoting Igrok
It is not the same. Or might become different some time later in the day. If you are to anticipate patterns rather then to see them, you will be in trouble soon. Could be the same mistake as the guys were anticipating H&S on the EUR/USD in one of the topics we have already discussed here. Would you, please, remind me what happened to that "picture-perfect bearish H&S" that they were cheering for in advance?
Besides, when I trade, I start my plan from defining a particular level for stops and only then look for an opportunity to take an actual position. I don't see any reliable level for stops if to sell Cable on today's uptick.
Perfect logic. I have to be reminded of this important trading instrument sometimes (logic, I mean). Thanks a million.
sans peur et sans reproche
  • #90
  • Mar 23, 2007 7:38am Mar 23, 2007 7:38am
Hi Igrok, is EUR/GBP at 4H in progress of making a diamond? Or at least it's possible to form it. Thanks for helping.
Tra-X
  • #91
  • Edited 9:25am Mar 23, 2007 8:55am | Edited 9:25am
A similar question: is there the second part of a diamond being formed now on GBPUSD chart (30 min or 1hr)?
sans peur et sans reproche
  • #92
  • Mar 23, 2007 10:44am Mar 23, 2007 10:44am
Quoting Traex
Hi Igrok, is EUR/GBP at 4H in progress of making a diamond? Or at least it's possible to form it. Thanks for helping.
I don't think it's a diamond. It doesn't even look like a broadening triangle yet.
  • #93
  • Mar 23, 2007 10:57am Mar 23, 2007 10:57am
Quoting ilanr
A similar question: is there the second part of a diamond being formed now on GBPUSD chart (30 min or 1hr)?
There is no diamond but the formation was quite tradable. Like I said, there was no need to anticipate anything in advance, but after Cable changed the direction of the main move of the day, the intraday high turned into a good level for placing stops. Having the direction of the main of the day being down, a short position quite naturally became generally preferable and recommended. It could be taken on the retracement back to 1.9670-75 with the stops above 1.9692. Almost the same position as you had suggested in the very beginning but, unlike your initial idea, it could be executed with controlled risk and obvious targets. Template #18.4.
  • #94
  • Mar 23, 2007 12:46pm Mar 23, 2007 12:46pm
Quoting Igrok
after Cable changed the direction of the main move of the day, the intraday high turned into a good level for placing stops.
I love it. Thanks!
sans peur et sans reproche
  • #95
  • Edited 1:30am Mar 25, 2007 1:17am | Edited 1:30am
Quoting Igrok
Shouldn't be confusing at all. Check out chapter 16, pages 133-140. It is all explained there.
1) Sorry, Igrok, I've seen only now that you had answered my question (I asked, how important is the timeline in recognizing the patterns). I'm not sure I know how to apply what is said in chap. 16. Let's take my original concern, the narrow comb-like range that forms during the Asian session and serves as the base of 19.1 or 19.2 formations. If this "comb" existed from 21:00 GMT to 03:00 GMT - is it valid for these formations? And if it existed from 01:00 GMT to 12:00 GMT - is it valid? In other words, how far can we push the notion of, e.g., "the Asian session"?

2) In general, I have a problem with this chapter. What it says, among other things, are two things: (a) there are lots of possible combinations of periods/sessions during which day's maximum and minimum prices are printed; (b) these combinations are not random, but rather occur in cycles or sequences. While the first assertion is not informative, the second one is important for predicting market behavior.
I tested empirically the second assertion. I recorded the sessions during which GBPUSD made its day's high and low in August, September, and October, 2006. There were two predominant patterns: either one extreme of the day range was during the Asian session and the second during the NY session, or they occured during the European and the NY sessions. [There were also very few instances of Asian-European, European-European, and NY-NY combinations, and no examples of Asian-Asian patterns. I disregard these for the analysis]

Technically, the second assertion in ch. 16 is that there is an "autocorrelation" between the patterns: if we know, what was today's patter, we can predict tomorrow's pattern, or if we know two last days' patterns, we can predict the next one, etc. Statistical tests of such autocorrelations showed that they are not significantly diffirent from zero.

I assume that if you wrote what you wrote in ch. 16, you have a way to successfully use the information which I failed to demonstrate statistically. Could you please provide some recent example of the cycles you refer to in this chapter and how they could be used? Thanks in advance...
sans peur et sans reproche
  • #96
  • Mar 25, 2007 3:45pm Mar 25, 2007 3:45pm
Quoting ilanr
1) Sorry, Igrok, I've seen only now that you had answered my question (I asked, how important is the timeline in recognizing the patterns). I'm not sure I know how to apply what is said in chap. 16. Let's take my original concern, the narrow comb-like range that forms during the Asian session and serves as the base of 19.1 or 19.2 formations. If this "comb" existed from 21:00 GMT to 03:00 GMT - is it valid for these formations? And if it existed from 01:00 GMT to 12:00 GMT - is it valid? In other words, how far can we push the notion of, e.g., "the Asian session"?


The templates 19.1 and 19.2 are specifically addressed to the certain technical patterns. Those horizontal channels are not that common as you might think they are just because they have been formed for a couple of consecutive days on Cable recently. However if we talk about technical patterns only, then it would be no mistake to say that they work more or less the same on any time frame and at any given moment. However in our case when such a pattern is formed in the very beginning of a trading day the stops that we place outside the borders of this pattern also are placed outside of the intraday trading ranges thus adding additional significance and reliability to those levels.

Quoting ilanr
2) In general, I have a problem with this chapter. What it says, among other things, are two things: (a) there are lots of possible combinations of periods/sessions during which day's maximum and minimum prices are printed; (b) these combinations are not random, but rather occur in cycles or sequences. While the first assertion is not informative, the second one is important for predicting market behavior.
Quoting ilanr
I tested empirically the second assertion. I recorded the sessions during which GBPUSD made its day's high and low in August, September, and October, 2006. There were two predominant patterns: either one extreme of the day range was during the Asian session and the second during the NY session, or they occurred during the European and the NY sessions. [There were also very few instances of Asian-European, European-European, and NY-NY combinations, and no examples of Asian-Asian patterns. I disregard these for the analysis]

Technically, the second assertion in ch. 16 is that there is an "autocorrelation" between the patterns: if we know, what was today's patter, we can predict tomorrow's pattern, or if we know two last days' patterns, we can predict the next one, etc. Statistical tests of such autocorrelations showed that they are not significantly different from zero.

I assume that if you wrote what you wrote in ch. 16, you have a way to successfully use the information which I failed to demonstrate statistically. Could you please provide some recent example of the cycles you refer to in this chapter and how they could be used? Thanks in advance...


Your assumption is not correct. The fact that the market makes intraday highs and intraday lows during certain market sessions does not say that what’s inside of those ranges should also be identical. I have never said that a pattern can be predicted based on those time cycles. You still miss the very fundamental idea of the templates. Patterns cannot and should not be predicted. The idea of the templates is to trade using a certain setup in a situation when a certain pattern is fully formed and thus can be identified. The market should be traded only WHEN and IF an actual chart MATCHES a certain template. It is about making standard trading decisions in standard market situations. In chapter 16 I just explain how that standard patterns might be shifted, expanded or compressed on the time scale without affecting the overall trading setup.
  • #97
  • Mar 25, 2007 4:29pm Mar 25, 2007 4:29pm
Quoting Igrok
The fact that the market makes intraday highs and intraday lows during certain market sessions does not say that what’s inside of those ranges should also be identical. ...snip... In chapter 16 I just explain how that standard patterns might be shifted, expanded or compressed on the time scale without affecting the overall trading setup.
Igrok, I appreciate your replies.

I didn't imply at all that knowing intraday highs and lows can help us predict the patterns. I'm not that naive. What I do understand from that chapter is that there is cyclicity in market activity patterns, that there are periods during which the daily activity follows the same patterns. As you say, for example, "I have witnessed many similar cycles when, almost every day, not only USD/JPY but also USD/CHF, USD/DEM, and Cable formed their daily trading range during a single market session" (p. 135). I failed to see evidence for such cycles in 3 months of Cable data. I would like to learn to identify such cycles, and this was the intent of my question...
sans peur et sans reproche
  • #98
  • Mar 25, 2007 5:01pm Mar 25, 2007 5:01pm
Quoting ilanr
Igrok, I appreciate your replies.
I failed to see evidence for such cycles in 3 months of Cable data. I would like to learn to identify such cycles, and this was the intent of my question...
Those cycles are usually long lasting ones. When the market shifts from one to another it usually takes few month or sometimes even years before making another shift. For example, I didn't believe my own eyes when some time in spring of 1999 the market all of a sudden began forming daily ranges in the very beginning of each trading day during Asian session totally ignoring all the news and all the fundamental events that were taking place after those Asian hours. The patterns were virtually the same as usual but they looked pretty much like being in a "fast forward" video mode. And this specific cycle had lasted for as long as 6-8 weeks being the shortes so far. You can't predict such changes, but when they take place it usually takes not more than a week to identify them.
  • #99
  • Mar 25, 2007 5:13pm Mar 25, 2007 5:13pm
Quoting Igrok
Those cycles are usually long lasting ones. When the market shifts from one to another it usually takes few month or sometimes even years before making another shift. I didn't believe my own eyes when some time in spring of 1999 the market all of a sudden began forming daily ranges in the very beginning of each trading day during Asian session totally ignoring all the news and all the fundamental events that were taking place after those Asian hours. The patterns were virtually the same as usual but they looked pretty much like a "fast forward" video mode. And this specific cycle had lasted for as long as 6-8 weeks being the shortes so far. You can't predict such changes, but when they take place it usually takes not more than a week to identify them.
Ok, I see what you mean. I thought the cycles were shorter ones. So, for example, would it be correct to characterize the present Cable cycle as making one extreme during either the Asian or the European session and the other extreme during the NY session?
sans peur et sans reproche
  • #100
  • Mar 25, 2007 5:22pm Mar 25, 2007 5:22pm
Quoting ilanr
Ok, I see what you mean. I thought the cycles were shorter ones. So, for example, would it be correct to characterize the present Cable cycle as making one extreme during either the Asian or the European session and the other extreme during the NY session?
I guess so. It looks pretty normal to me with its activity being reasonably distributed on the time scale inside a trading day. This means that you can sleep during Asian hours and begin working when Europe steps in. Now even NY session alone looks quite tradable. That time back in 1999 you could do the same in just a few hours on Asia and then turn the monitor off to do something better than just watching the grass growing and the paint drying.
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