Extracted Thread (per thread starter's request)

and I condensed yours. Well said.

ak, can you explain the significance of using sma as opposed to an ema, I noticed you sometimes have a combo on your charts.

Hey, glad you finally stopped by...

I wish I had an eloquent and well thought out answer for you, but that would require me being smarter than I am and having done this for longer than I have. I don't want to split too fine a hair on this but an EMA on a short TF seems a little pointless, so I prefer to keep most of them "simple". The longer ones seem to respect the EMA's more, except that the 200sma seems to be very popular as well and I use it on almost every chart for reference and out of interest.

And of course that could easily be the reason it "works", if everybody is using it. That of course opens up the potential for a market maker to "misuse" it as well I guess...

I've found the 21sma to be very reliable acoss several TF's especially the lower ones. One part of my brain says there's no real logic in 21 of anything, such as there are 24 hrs in a day and 60 minutes in an hour and so on. Yet I'm very confident in using it on my 3m chart which is one of my workhorse TF's. I'm probably adjusting for it mentally on the other TF's w/o really realizing it, but I don't know how to gauge that.

I know there's folks who could jump in here with elaborate explanations that make far more sense than anything i can say and I personally hope they do if they see an opening ((like ovaforty...(hint)). I could sit back and listen to that conversation all day.

I'll add that the 50ema is a strong component of the auslanco system and a chart just "doesn't look right w/o it" to me, specially on the longer tf's. Not very scientific, but when price gets near that red 50ema line on any of my charts, I pay close attention to what happens next.

I should stress here I don't use MA cross "systems" to trade in the traditional sense, at least as triggers like many folks do and with seemingly decent results. I really don't "use" most of these MA's as much as it may appear I do, but I do watch price closely in relation to them and factor that into my decisions.

That said, I do have some very fast MA's on my 1-3m, and 6-20m charts that I do trade off but they are non-traditional and won't work on MT4 in any event, so I don't post them on my charts as they would be irrelevant and confusing.

I don't think I can add much to this except to say that if I could only have two indi's on my MT4 charts ((not counting pivots or fibs)), I 'd probably pick BB's with settings tweaked for the various TF's, and a 21sma. Next would be the 50ema, and either the 34sma or 62ema depending on TF, and probably the 200sma on everything for reference.

If you see a weird MA on any of my charts, you can bet it's probably something I'm playing with and forgot to hide before the screenshot (like the 162 on the daily ).

I think the most important comment I can make here, is that subjective as it is, I think that some of these ((intraday)) things change to some degree as market dynamics change. I remember last summer/fall I had a setup on EJ in particular that was deadly, involving the 62ema. It was an awesome Trend setup but seemed to weaken when the Ranging and Ping Pong action started.

More than anything, knowing how to use a couple simple tools along with Nimbleness and Adaptability will make you more pips and help you keep them than anything else... imo.

The most unbelievable fishermen I ever knew could go out with a couple spoons or flies in their pocket and catch fish when nobody else including the folks who brought along one of everything in the Catalog in their tackle suitcase couldn't get a nibble...

Many thanks for the reply. I've dusted off my charts and dove into tweaking my "style". I suppose I had lost some perspective about my particular trading method(s). Read some great threads on FF and am refocusing back to basics.Good to see ya.

2 or 3 hrs into things and altho there doesn't seem to be any imminent reversals out of the Gate, there's no direction either at this point. Gap up on the OPen of a''rd 30 pips or so depending on the platform, and a short drive down to the 3000 figure but good signs of support there so far... at least as I post. If that changes then this post could be obsolete pretty quickly.

In that case I'd revert back to my last weeks view of a TZ or Transistion Zone in the making and remember those have been explosive and decisive moves from one zone into another one. I wouldn't get in front of one of those trying to pinch a few countertrend pips.

Targets would then be as stated below...

I've gone ahead and lit up the negative fib extensions on the existing fib for the Daily. The Lower anchor is 3110, very close to the 50% level of the larger fib using 3735High/2455Low anchors. I like that one.

You can see in the white circle a convergence of -50/-62% extensions and the 23% level of the Large move up. That converges with the middle of the lower long term S/R zone shaded in gold. That creates a 75 pip zone all told that I would expect to be HOTLY contested before we go any lower.

Someone posted elsewhere last Friday that once we broke 30xx, that it'd be a fast drop to 25xx. I strongly disagree. I'll take it of course as I'm short, but I don't think it'll work like that.

ADD: Well, that 3000 level gave way as I posted ((2965)), so maybe it's YeeHaw time after all. Meaning either it's clearing the sub 3000 stops and about to go ballistic Northwards, or Look Out Below. I honestly can make a case for either scenario right now ((northwards is the weaker one)), but I am short and profits protected. I'd like to see this TZ completed to confirm my views from last week and see this thing in action so's I can watch the followup.

That would require price to shift and consolidate below the gold S/R zone at 3050/3100.

Since ya'll are talking MA here...

The chart below is a weekly, 9EMA/21EMAs plotted. 9 is the purple, 21 is the gold. Now that won't help you one bit trading intra-day (the long term trend rarely effects the number of days in either direction, it just makes the trending days direction longer on average), but it works really well for longer-term traders.

Since most long term traders need long term movement in order to make money, these higher TF levels tend to have less retracements and whipsaws (altho they can happen when volatily is nutso, which makes it difficult to trade a recession on longer term TFs). If you make an "EA" based on the 9/21 off the weekly, just buying and selling as they cross, you'll find it's actually profitable over multiple pairs. Just set your stoploss at the 5 week high/low and move it to BE after 1000 pips or so.

I've used that method on my retirement accounts for years. I trade indexes with it. Basically when they cross, I start scaling in or out of a position (20% of my total position per week or whatever, up to you). If I'm worried about buying on strength I'll wait for the stoch to pullback below 30, or for price to pull back to the 21 MA on a lower TF (daily TF, usually), but normally that's not a problem since you're catching the longer trends.

Everyone wants to play "guess the long term trend." It's kindof fun to do. But why guess it when you can have such a simple statistical edge?

One thing to have fun with... is the areas that cross, or the areas that almost cross, tend to set up for S/R later on.

Done and did, and will be watching this "work"... if and when it crosses again.

Will be out and about today, shorts intact with protected profits... not a long anywhere in the bunch.

This drop seems not quite as explosive as some of the prevous ones, but so far appears to be just as relentless. There's a clue there as well.

Bear in mind this one is a 12hr to get the full picture back to the period leading up to the FOMC spike... large bull candle at left edge of upper S/R zone.

Key to this is if price remains below the gold bar, but it's looking fairly stable. By the end of the NY session, methinks things should have established their course for the next season, but the writing appears to be on the wall for now.

On another note, bad case of Forum Fatigue so am hanging out here tfn or any other thread with intelligent life on it.

Here's a 20m chart with the current PA from the Weekly open and Pivots only.

S2 convergence at the xx00 figure is clearly working as support for now.

Just a thought... a 50% retrace ((2970ish.. not shown)) of the PA so far from the Open takes us up to within 6 pips of S1 again and slightly above the 21sma which has been holding well so far ((yellow circle)).

A negative -14% extension of that same fib converges within 2 pips with the SP at 2870 (grey line) and just below the xx80 psych level. I could see it stalling there for now real easy and selling some tickets on the Long Bus to the folks of that persuasion... There seems to be a crowd gathering at the ticket counter already, but I'm keeping my seat on the Short Bus for now.

Errands calling and I have a lot to do... careful trades all.

Great analysis as always Ak.

Tickets for the long bus will be sold much much cheaper in the not too distant future. So why pay more?

A little past mid Asia and we haven't seen but a portion of the retracement to the potential 2960ish level on previous chart in addition to the strong rejection off the 2945 leads me to believe this is all she wrote for the time being, and we have more Downside to go before looking for any significant upside. Barring a Break and Clear of the blue line AND the Daily Pivot at 2952, then here we be... and that's my inclination for now.

This is consistent with what I've seen so far on the PA when we're shifting into a whole new PCZ (discussed last Friday)... Decisive and relentless with little to no retrace following any time soon.

These consolidation periods can be account killers as people start getting impatient and seeing things that May or May Not actually be there... It's either Death by a Thousand cuts, or one False Break and the herd stampedes.

Shorts still protected and knocking off for the night. What I don't see can't hurt me.

I posted this in the other thread but want to participate in this thread more so here goes.

Those going long are probably doing so because of what they see on the daily and/or the H4 chart. Stoch oversold and Macd is below water. Seems like a good idea...

http://i39.tinypic.com/29wwfbo.gif


Except that according to the M30 chart, the bull trend may be short lived. Stoch is in an overbought situation. So if I wanted to go long, I would at least wait until stoch got into an oversold situation...
http://i39.tinypic.com/20k53pf.gif


And according to this chart, it may be a while. A long while before it materialize.
http://i43.tinypic.com/168h1r5.gif

So on a shorter frame, long may be a good idea. But it's far from guaranteed pips at this point.

I just don't see much topside yet beyond that 2970ish level I was looking at earlier this afternoon.

The negative fib extensions worked well on the way down and I think they'll do the same going up, and this momentum ain't strong, it seems to lack conviction... at least to me.

I'm kind of waiting on the DP to get hit and see what follows, but I won't be watching it very long here.

Backing up on the 12 hr, there were some good S/R levels in that area on the the lead up to the FOMC spike as well.

sounds familar...

http://www.forexfactory.com/showthread.php?p=2602787&highlight=idea#post2602787

Sure does eh?

And now we watch which way this thing tilts...

Shorts lean to the Port... Longs lean to the Starboard...

As Bemac eloquently explained, don't fall overboard

The current DP is at the xx50 psych level, just below the other levels I mentioned in previous post, and right up against the lows of the early morning ((Central time zone)) hourly candles from yesterday... a'rd 4 to 6 am... pre NY session.

Support turned Resistance and don't bump your head... I'd expect some profit taking at the Pivot, and then the tale will be told.

ADD: And yeah Jay, that 30m is lookin rough for longs atm under these PA conditions... good catch.

Short term key right now for me would be the 5 or 6m 21sma right at 2940, That has been good support since the retest of the M2 pivot a couple hours ago and price will need to close below that on at least the 5/6m or something to weaken that level, otherwwise...

If price hangs a'rd the DP for any length of time, then I can see it ooching up towards M3 at 2984 as posted earlier. That wouldactually be fairly classic Pivot action on a typical asian session, so no surprises if it does, I'm just not anticipating it in this low momentum environment right now.

When it taps the DP and collapses, that's typical, and when it hangs a'rd in low momentum like this it may work it way up. The other level to watch would be the QP at 2968, halfway to M3.

And with that I am outa here. Careful trades all....

Just checking in.
I hope all are well.
Be back soon !!!