Extracted Thread (per thread starter's request)

Posted on the "other" thread but just as relevant here.

The madness

My order got triggered earlier today at 2827

http://i40.tinypic.com/dgigl5.gif

Madness because according to the daily chart, the stoch indicator is dangerously near the overbought level.

But there is method to the madness. At least that's how I rationalize it.

http://i42.tinypic.com/2meztbd.gif

Weekly chart's stoch is a very very different story.

Neither of these are H1 charts or H4 charts for that matter and I'm aware of how I can be getting some serious bite marks on my cheeks. That's where MM comes in. And as always, I'm holding on to my fu@#ing hat.

Here's a mosaic of longer TF's... On the 12hr, note the 150% Fib extension converging with the 2900 figure. Should be a strong level, and a break there very significant for future movement.

A lot of stops are being cleared both ways ever since the recent 2480 Low and now the upside is getting cleared as well. This week will probably leave us with more questions than answers tho.

This a good example of when you have to look at a candle that is technically screaming one thing, and really ask yourself what else is going on in the market... and what do you do? The 3 2hr candles in the middle of the first chart are a good example of that.

For comparison on the 12 hr from 7am CST this morning, check here --> http://www.forexfactory.com/showpost.php?p=2595868&postcount=293
Note the shaded fib at 2864 was in fact reached, and the Break and Clear of a closed 12h candle of the 50ema (Red) is now Support (shaded circle)

Currently nursing a long from 2806, and looking for add-ons.

I have been asked by Mr. Ak to post this in here, with great pleasure.

I was recently told by someone on this forum that PA does not always reveal the true intentions of the market movers. I strongly disagree. There is always a hint or melody in there somewhere.

One of the reasons why I do not trade the smaller time frames is because of the snippet below. To do it effectively and consistently, you really have to be on your game. The stress and amount of work involved is too much for me. Sure some can do it, not denying this. Kudos to you if you do. It also creates grey hairs on the noggin, something I really want to avoid at all costs

I can trade smaller time frames, don't get me wrong. I do however need days to recover from the headache afterwards. Let me add that I'm a perfectionist. My profession outside trading is carpentry/builder/civil engineer and I am also a qualified paramedic. When I do something, it's all or nothing and precision to less than a micrometer. No half-arsed efforts here. My trading style is much the same. Even a tradable PB I will dissect to its smallest form before placing my orders.

Below is the quote that changed my trading for the better. Call it an "Ah Ha" moment if you will, I still to this day have "Ah Ha's" when I read it. The dinosaur traders {looks towards Bemac's way} will probably read this and chuckle to themselves (dinosaur meaning experience, NOT age). Give us due credit, many of us are only babies in this game, myself included

Its reference to music also pricked my ears as I enjoy strumming on the old guitar

Also note that it is an incomplete article. If anyone knows where to find the rest of it, or the author, please do let us know.

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Multiple Time Frame Analysis
In my years as a trading educator I have found that most losing traders have a critical glaring weakness in their approach to analyzing a market. The majority of their focus is placed on mathematical technical analysis tools such as moving average convergence divergence (MACD), the relative strength index (RSI) and/or stochastic studies (among many others).

All of these types of tools are derivatives of price movement and are lagging indicators. To make matters worse, many of these traders attempt to use these tools in isolation and they completely lose focus on reality; indicators don’t move price, price movement moves indicators! Then the nail in the coffin occurs when the trader uses this approach on only one or two time frames (i.e. a 1- and 3-minute chart or a 5- and 15- minute chart).

The problem with this approach is the trader is not focused on why the price is moving in the first place. Price moves occur because there is an imbalance of supply/demand in the marketplace and this imbalance is created from the activity of professional traders. These professionals are very cagey when it comes to disguising their true intentions and hiding their positions from the uninformed retail trader. The average retail trader doesn’t understand how to read a chart in order to determine the underlying strength or weakness in the market. Even for a trained VSA expert, it is nearly impossible to accurately forecast the near-term direction of a market by analyzing a single time frame; there just isn’t enough corroborating evidence if we only look at one or two time frames.

Think of each singular time frame as a musical note, when we combine multiple time frame’s together we go from the market blaring out one note noises, to the market singing us a melody and revealing the message that is so often hidden to the trader who can’t read a chart; that message is where the professional traders are positioned. Todd Krueger 2006 - http://www.sfomag.com/article.aspx?ID=907&issueID=55
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The last paragraph is probably the best analogy I have ever read.

Market movers can and do manipulate the price (call it head fakes, traps, whatever). The one thing they cannot do however is do it to ALL time frames. I believe the larger the time frame, the more difficult it is to manipulate (that says difficult, not impossible). This doesn't mean that you become immune to false/trap moves either. You can however catch them early by using the above approach.

I will post more of my inexperienced thoughts on this when I can articulate what's going on inside my head a little clearer.

Affinity personified... UK . Toolmaker by qualification. willing to go to 5 tenths of a thou to get what I need.

I'm old and that's SI terminology. Metric is like...
One them kinda mm things but cut into a couple of hundred pieces

But Woah... Paramedic!?
Kudos... I hope you Play as hard as you work. And that doesn't mean Mountain Biking with no Rear Brakes. It means Mountains, Tent {cabin allowed} loved ones & TIME FOR THOSE LOVED ONES.
Stay Balanced.

{not suggesting you are not. Just took the opportunity to pass a little gas.}

That's why I like trading 5 second charts...

we are still in the same channel but now with noticeable divergence in 30M 1H 4H, here a 30M chart

Performence on Diversion Please. How Often & How Far does it have to Diverge to cause Positive Pips?

Your serve.

CC... these pages are all too dim w/o you gracing them from time to time with your presence. Don't be such a stranger.

Going about and Doing Good all over FF keeps you pretty busy I know...

Hey AK, how ya' doin' tonight my friend.
Listen. Everybody else is gone & I'm just about closed. How about I give you a ride home?

I think we live on the same continent but then again; I'm probably only One Sheet Into The Wind less than you.

G4T

Thanks AK, I'm running dry of Forex subjects with the book writing thingy... still going on (it's taking more time than planned). Besides, I feel a little "lonely" now that I switched to AUD/USD... anyone trading that pair?

As soon as I am totally free from duty I will dedicate some time to delve deeper in that "grid and sweetspots" thing. Found out many interesting details. I'm always here.

I'm tellin ya B... this goin long is a pure adrenaline rush. I'll be lucky to sleep before Sunday.

Pips in the Wind, Traders in the Wind, Bemac in the Wind, Islander is sure to be tacking here and there in the Wind snatching pips from the Unsuspecting. I feel like I'm learning how to trade all over again after shorting for the last half year.

You make your gas money yet for the Spring Fishing Trip?

But yeah, I'll take the ride. Someone will have to get Cobra out of the ditch tho. Hey!! That looks like Jay headin this way... better hit the gas. He's gonna give me no end when he sees i've gone a Longin...

Well CC... I would nominate you as First Lady of FF, active members anyway. I understand there were some other girls way back near the beginning before my time, but not sure they're still a'rd these parts.

Speaking of girls and trading... My wife came in this evening, stared at my charts, and said she hoped I was trading that upside down h&s on the 1m chart I had been staring at for a few hours...

When I said no actually I wasn't, she just shook her head and left muttering something.

She sat all the way thru Chris Lori's course a couple years ago, and did very well actually. She's an artist, so patterns and seeing things are her Cup. I'm just an art appreciator, I can't even draw flies.

When it is Time, you must be sure to tell us more about the book...

Great article NF. It's explaining why I constantly look at all time frames and tend to trade the larger ones. And it's doing in a much more eloquent way than I ever could.

From time to time. Any reason I should trade it more often?

My Imperial knowledge extends about as far as the 5/8's spanner I have in my tool box.

And yes, I do work hard but I play much, much harder. Life is too short {can be even shorter than you expect}.

Stay in touch...

We use automatic divergence detection in the THV system but I prefer to draw it by hand if the eye isn’t enough.

I disabled it on 1M THV because it isn’t reliable on that TF.

On 5M and above it can give good anticipated trend change signals, but as all signals they don’t work always, otherwise you could code a divergence EA and play with the kids or have fun in the beach while the EA makes the bucks for you.

I wouldn’t say how often it need to diverge, enough once a while, lol.

The Trix auto div detection is relative slow, it needs 2 to 3 bars to set a warning arrow, detecting it by eye or TL is much better and faster, but for the newbees we have it on the charts, so at least they learn, even if it’s sometimes to late to take a trade.

I add a div chart for better understanding, generally they differ between hidden (trend continuation) and regular (trend change) divergence.

Sorry for the shortage, there is lot more to talk about that theme, but I planned to have a nap till the London session

IMO and from so little experience up to now:

1. Half the margin of EURUSD (at the actual rate) for the same pip value. Quite important on a small account.

2. Less choppy/whipsawy... more predictable chart patterns, respects levels with more accuracy (still have to check backwards but I remember EUR/AUD to be likely as to patterns, when I traded it in my early times).

3. When it trends, it trends. When it ranges, it ranges. (ok this sounds obvious and might be a part of point 2... but that's how I feel about it).

4. More definite boundaries. Not to brag about it but I was able to make nearly 600 pips in 3 days without having to stare at the charts, and with much less trades (trailings work better), unlike with EUR/USD. I could even get to sleep leaving trades open, which I wouldn't do with Euro or Pound, ever. Maybe I'm getting better at it, but I really think that the pair helps a huge lot in the outcome.

A very peaceful currency pair, IMO.
Strange thing is that it seems to move much less in its own session than in the rest of the day. Except near the end.

This is why I love having Bemac around....

Bring on $0.50 and below!!!

No, it's not a prediction. I have somewhat of a permanent short on this pair with my business ties in the US of A.