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Trading setups around SR Zones

  • #101
  • Mar 15, 2009 2:34am Mar 15, 2009 2:34am
Quoting thegunslinger
Swings are a very important factor in my analysis....
Looks like a very bullish confluence of signals! How did you get volume data? Is it just the volume for your broker/dealer?
  • #102
  • Mar 15, 2009 3:19am Mar 15, 2009 3:19am
Quoting mathematician
Is there a reason why not all the swing points are marked on that chart?
That indicator for NT(attached) allows you to set the swing parameters to
whatever you want.

The swing does go well with HA. I'll post a chart or two with different
market conditions.
Attached File(s)
File Type: zip SwingHiLow.zip   9 KB | 635 downloads
  • #103
  • Mar 15, 2009 4:47am Mar 15, 2009 4:47am
Here's a chart with ranging and a breakout. I've set the swing parameters to look for breaks from or containment within longer standing swing points, in this case 30 minutes. What the hell! It's the weekend I'll even through on the ATR - let's clog our charts up completely! It all makes sense when the market's closed, right? LOL!
Attached Image (click to enlarge)
Click to Enlarge Name: HAandswing.png Size: 35 KB
  • #104
  • Mar 15, 2009 6:58am Mar 15, 2009 6:58am
Here I've marked swing lows in red and swing highs in blue. Notice how during the trend, there is a perfect alternative red, blue, red, blue, ... through time. However, during the range, sometimes there will be two reds in a row or two blues in a row. Also, during the range, all the reds are at the bottom and all the blues are at the top; there is no interlacing.
Attached Image (click to enlarge)
Click to Enlarge Name: Swings.png Size: 26 KB
  • #105
  • Mar 15, 2009 7:05am Mar 15, 2009 7:05am
Quoting FXSurfer
What the hell! It's the weekend I'll even through on the ATR - let's clog our charts up completely! It all makes sense when the market's closed, right? LOL!
  • #106
  • Mar 15, 2009 8:12am Mar 15, 2009 8:12am
mathematician, I hope you don't mind me borrowing your chart, I just thought I would outline what I see from the same period.

Chart1
I like looking for good strategic locations that seem logical decision points for many traders (support/resistance). I am then trying to read what is happening at those locations by the price action that is unfolding. It was obvious price was having a hard time breaking into new lows at the major pivot shown in the chart. Its great when you get price action that confirms your view of the market with plenty of room to move but often you just have to bite the bullet if you don't want to miss the entry.

Chart2
When I am trying to read price action I find the most useful information is where the individual bar highs and lows are placed relative to each other rather than the actual pivots. Or I should say, I am very interested in where the micro pivots are placed within the context of the bar highs and lows surrounding them. Sorry if I sound confusing, just look at the picture and you will get my drift
Attached Image(s) (click to enlarge)
Click to Enlarge Name: reading PA1.jpg Size: 112 KB
Click to Enlarge Name: reading PA2.jpg Size: 57 KB
  • #107
  • Mar 15, 2009 8:20am Mar 15, 2009 8:20am
Hi all, regarding scaling in / out positions, I just read an article related to it. It also talks about things other than that particular subject, but those other pieces of information are also insightful (e.g. dealer and diversification).

Here is the link for those who are interested:
http://www.sfomag.com/article.aspx?ID=598&issueID=35

Hope I am not off-topic as I see now the subject seems to be changed to swing analysis.
  • #108
  • Edited 11:21am Mar 15, 2009 10:58am | Edited 11:21am
Quoting dreamtrader
Hi all, regarding scaling in / out positions, I just read an article related to it. It also talks about things other than that particular subject, but those other pieces of information are also insightful (e.g. dealer and diversification).

Here is the link for those who are interested:
http://www.sfomag.com/article.aspx?ID=598&issueID=35

Hope I am not off-topic as I see now the subject seems to be changed to swing analysis.
Really Good! Thanks DT.

Not off topic IMO. All pieces of the same puzzle. S/R, Market Stucture, Position Sizing - I think we need it all.

I've saved the article as a Word document since that online mag may not keep it available on their site for long.

Also attached: Image from the article.
Attached Image
Attached File(s)
File Type: doc Trade Like a Dealer.doc   60 KB | 664 downloads
  • #109
  • Mar 15, 2009 1:05pm Mar 15, 2009 1:05pm
The Zig-Zag is another swing drawer. Here used to show minor swings (5 pip)
within larger swings (25 pip - using the previously posted indicator).

Next up for the thread: Elliott Wave Theory combined with Phases of the Moon.
Attached Image (click to enlarge)
Click to Enlarge Name: zigzagswing.png Size: 54 KB
  • #110
  • Mar 15, 2009 1:30pm Mar 15, 2009 1:30pm
Quoting ProbaBill
mathematician, I hope you don't mind me borrowing your chart, I just thought I would outline what I see from the same period.
Not at all. I threw that chart up there for people to dissect and analyze. I thought it was a fantastice snapshot of price action because it shows both trending and ranging behaviour.
Quoting ProbaBill
Chart1
I like looking for good strategic locations that seem logical decision points for many traders (support/resistance). I am then trying to read what is happening at those locations by the price action that is unfolding...
Let me say, your analysis sounds great! If you can make decisions like that during live trading, you must be doing very well indeed!

My goal is to have a few setups that, by the very nature of their patterns, tell a certain story of what is happening in the market at that time. In other words, a few patterns that indicate a directional move with a high probabiliy. It has to make sense though. Some random pattern that happens to statistically work more often than not...well, that could just be a fluke; it's reliability could dissolve if you test it over a different set of data. On the other hand, if the pattern makes sense and it has a "story" behind it, much like the analsis you did for the chart you posted, ProbaBill, then we probably have a pattern that will last for a long time because it is a pattern of human behaviour.

Quoting ProbaBill
Chart2
...Or I should say, I am very interested in where the micro pivots are placed within the context of the bar highs and lows surrounding them...
This could be one of those patterns. If you see a swing low near other swing lows, or near what is clearly some S/R, that could be a high probability buy signal.

One thing I can tell you is that just "blindly" taking any swing point break on a 1-min chart seems to be profitable if you employ scaling in. More specifically, I mean buying when price breaks above a swing high and scaling in on subsequent swing high breaks that are above the previous entries (only add in if your position is positive). You can do a trailing stop. The way in which you trail your stop is where you can get creative, otherwise it's quite mechanical. Then if the opposite swing is broken, e.g. if price then breaks a swing low, you stop and reverse. That's what I did in the trade on post #77 . Some days it's a dream, some days you get murdered. However, after 33 trades, it's up 96 pips. That's an average of 2.9 pips per trade. Not great, but not too shabby. Anything that's consistently profitable is gold. However, I must warn you that it's probably too soon to say for sure. Those 33 trades happened over only 3 trading days.
  • #111
  • Mar 15, 2009 1:38pm Mar 15, 2009 1:38pm
Here's another way to set it up with Zig Zag and Swing indicators.

It should be pointed out, for those who haven't used these indicators, that swings can only be connected after they develop. So, in order to use this method real-time the swings must, to some degree, be anticipated. Which can be done as the market unfolds.

From the Ninja Trader Forum:

http://www.ninjatrader-support2.com/...9&postcount=58
Attached Image
  • #112
  • Mar 15, 2009 1:42pm Mar 15, 2009 1:42pm
Quoting dreamtrader
Hi all, regarding scaling in / out positions, I just read an article related to it. It also talks about things other than that particular subject, but those other pieces of information are also insightful (e.g. dealer and diversification).

Here is the link for those who are interested:
http://www.sfomag.com/article.aspx?ID=598&issueID=35

Hope I am not off-topic as I see now the subject seems to be changed to swing analysis.
That's not off-topic at all. We have been talking a lot about swing points, but I, for one, am very interested in combining swings with scaling in. Sound money management, a solid trading system, and controlling your emotions are all essential.

By the way, that is a great article. I've read it before. It really made me think a lot. Currently, I'm against any type of scaling except scaling into winning positions. Scaling into a losing position (averaging your losses) can be very dangerous, but it can also be done effectively if you have some rules to keep you from getting out of control. Clearly it's very profitable if the dealers do it. Of course, they have very deep pockets.
  • #113
  • Mar 15, 2009 1:59pm Mar 15, 2009 1:59pm
Quoting FXSurfer
Here's another way to set it up with Zig Zag and Swing indicators.

It should be pointed out, for those who haven't used these indicators, that swings can only be connected after they develop. So, in order to use this method real-time the swings must, to some degree, be anticipated. Which can be done as the market unfolds.

From the Ninja Trader Forum:

http://www.ninjatrader-support2.com/...9&postcount=58
It's great to see all these ideas coming to the table! This is, without a doubt, the most productive thread I've ever read.

I noticed something interesting about your chart, FXSurfer. In the large up trend, if you had gone long every time there was a confirmed swing low (confirmed after the 3rd bar, the bar after the lowest bar in the middle), then those would have been some good scale-in opportunities. However, if you had gone long on the break of the swing highs that happened just before all those swing lows in the up trend, you would have had better entry prices. In other words, the bars that confirmed the swing lows in the up trend had higher closing prices than the prices of the swing highs in that up trend. So it would make more sense to buy the breaks of the swing highs rather than buy right after a confirmed swing low.

Let's start to really test these ideas. If anyone has a good idea, test it over 20 trades. See how it does. I would encourage testing a trade setup along with a money management technique because they are inseparable. Maybe something works after 20 trades with no scaling. Then calculate what would have happened if you had scaled, provided you had recorded enough data to make these calculations. Or just test it again with scaling.
  • #114
  • Mar 15, 2009 4:10pm Mar 15, 2009 4:10pm
Since we're thowing out various ideas, considering what are normally best times to trade will most likely be useful.

Here's some stuff:

http://kreslik.com/forums/printview.php?t=1093&start=0
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURUSDvolume.png Size: 11 KB
Click to Enlarge Name: EURUSDspreads.png Size: 10 KB
  • #115
  • Mar 15, 2009 4:11pm Mar 15, 2009 4:11pm
...
Attached Image
  • #116
  • Mar 15, 2009 4:26pm Mar 15, 2009 4:26pm
Quoting mathematician
Looks like a very bullish confluence of signals! How did you get volume data? Is it just the volume for your broker/dealer?
It's tick data, so while not as 100% accurate as true volume it is a decent substitute. ATR with a 1-day period (I see someone using it) is also something like 80% correlated to volume so can be used in its absence.
  • #117
  • Mar 15, 2009 4:29pm Mar 15, 2009 4:29pm
Quoting FXSurfer
Since we're thowing out various ideas, considering what are normally best times to trade will most likely be useful.

Here's some stuff:

http://kreslik.com/forums/printview.php?t=1093&start=0
Excellent data! From the number of quotes graph, it's pretty clear that the London morning and New York morning are the most active times. The ATR does not seem to agree with these times. Is this ATR graph just for one day or is it an average of ATRs from many days of data?
  • #118
  • Mar 15, 2009 4:38pm Mar 15, 2009 4:38pm
Quoting thegunslinger
It's tick data, so while not as 100% accurate as true volume it is a decent substitute. ATR with a 1-day period (I see someone using it) is also something like 80% correlated to volume so can be used in its absence.
Very interesting. I've always had a hunch that a bigger move indicated greater volume, simply because it seems to make sense that if there is high volume, there will be a big move. But I didn't know that there were studies done and that ATR(1) is correlated to the actual volume so well.

If that is the case, it would seem that using ATR(1) is unnecessary because with just one period in its calculation, the value of ATR(1) will almost always be equal to the high-low range of the most recent bar. So you could just use the length of price bars as a volume indicator.
  • #119
  • Mar 15, 2009 4:42pm Mar 15, 2009 4:42pm
Quoting mathematician
Excellent data! From the number of quotes graph, it's pretty clear that the London morning and New York morning are the most active times. The ATR does not seem to agree with these times. Is this ATR graph just for one day or is it an average of ATRs from many days of data?
The times pretty much jive. For the most part from about an hour before London thru the first couple hours of the session. Then, same thing for NY.

The Kreslik data charts are EST and my ATR is Pacific time zone. The ATR that I put up was just one day-in-the-life that I cherry-picked but, it's fairly typical. As you have previously noted there are lots of other opportunities, for example during Asia, that occur. Just not with the regular frequency of the typically higher volume periods.

I just noticed that my 1 hour chart bars do seem to be off one hour. Hmm...

Just one more note: The best times aren't like clockwork. But, it will at least help to narrow in on at least when not to bother trading. Which is pretty good in itself.

Another important time filter: Best/Worst Days of the Week.
  • #120
  • Mar 15, 2009 4:48pm Mar 15, 2009 4:48pm
Quoting FXSurfer
The times pretty much jive. For the most part from about an hour before London thru the first couple hours of the session. Then, same thing for NY.

The Kreslik data charts are EST and my ATR is Pacific time zone. The ATR that I put up was just one day-in-the-life that I cherry-picked but, it's fairly typical. As you have previously noted there are lots of other opportunities, for example during Asia, that occur. Just not with the regular frequency of the typically higher volume periods.
Oh, the ATR times are Pacific. So add 3 hours, and yeah, it's almost exactly like the other graph.

Have you every heard about using the average daily range to project targets? For example, let's say the average daily range of EUR/USD is 120 pips. If price has made a major low, what looks like (is anticipated by the trader to be) the low for the day at 1.3160, then they will add 120 pips to that and project that price will make it up to 1.3280 at some point during the day. Apparently it works quite well.
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