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  • #3,161
  • Edited 5:08pm May 18, 2009 2:33pm | Edited 5:08pm
Quoting Baba G
did you see what i see? in my charts dudes.....or does the nakedness shock you?let me know people.......g
Hmm ... so the coloured areas cover 4 weekly bars or so ... and looking at the highs and lows are therefore each monthly candle / bar ...
  • #3,162
  • May 18, 2009 2:35pm May 18, 2009 2:35pm
Quoting strat
For those with a “fixed” mindset who are not prepared to stretch trading boundaries....
Hi Strat - seems your Sun bars are worth a lot more than our UK ones that don't have the benefit of the Asian session.

My only query would be why you would take so many closely correlated trades? Do you ever forgo a trade on a pair and load up on another (ie long usdchf and short cable) or do you trade each pair solely on its merit. (ie correlation is worthless - I seem to recall you saying so before)
Trade less and become more profitable!
  • #3,163
  • May 18, 2009 3:06pm May 18, 2009 3:06pm
The Power of the 20

I thought we would have a refresher on the value and power of the 20.

The 20 is used by most institutions, banks, funds and big boys as part of their trading. Some use it with the cross of another MA or MAs as a system. Many of the little guys (us) use the 20 in some form or other in our trading. Some professional traders use the price and 20 as their method by buying a close above the 20 and selling a close below the 20 (don’t try this at home, as they say, as the Professionals also use filters to avoid whipsaws and “false” moves).

To a certain extent, the use of the 20 becomes, like Fibonacci retracements, a self fulfilling prophecy.

Our use of the 20 is not as a trigger in any shape of form, but as one of the tools to help us in our decision making process. It should never be used in isolation and never be taken as “the last word”.

Think of the 20 as equilibrium, or the balance line which is the point at which buyers and sellers AGREE on price. Remember we are dealing with energy both of the market and its traders. Energy ALWAYS seeks balance through the path of least resistance. If you haven’t done already, you should study thousands of charts (daily and up) with the 20 and 50 moving averages on and note several things:

The slope of the averages
The cross of the averages
Price relative to the averages

You should also take note:

What the market is doing when the 20 is flat
What the market is doing when the slope is up AND how STEEP that slope is
What the market is doing when the slope is down AND how STEEP that slope is
What happens to price when the 20 acts as resistance
What happens to price when the 20 acts as support
How price reacts around the 20
What happens when the 20 is broken
What happens to price when it crosses the 50
What happens to price when, and after, it is trapped between the 20 and the 50
What happens to price when it is stretched away from the 20

Think of the 20 as a magnet which attracts price (equilibrium). Outside forces greater than the power of the magnet ( buyers or sellers) pull prices away from the magnet. As price pulls away from the magnet, it takes the 20 with it but at a slower and lagging rate. The price reaches a certain point beyond the 20 where the 20 invokes its elastic limit and pulls prices back in line.

If you take the time to study each pair going back as far as your data allows, you will find that there is, for each pair, a certain number of pips that price moves away from the 20 before the 20 pulls price back into line (equilibrium)

The slope of the 20 gives you a “rough” approximation of momentum – use this with my TLs and you have a very good Momentum system.

The slope of the 20 and the cross of the 20 above the 50 tells you which direction you should be trading in.

The 50 is not as powerful as the 20 but when price “uses” the 50, take note.

As per my style of no spoon feeding, I have given you the pointers, now you do the work and prove the value of the 20 for yourself. Nothing works better than something you have proved for yourself AND therefore BELIEVE in.

Add the knowledge of the power of the 20 to our PASR and we have an edge over most traders. In case of any conflict, PASR rules over EVERYTHING.

Let’s look at a few examples:

AUDJPY 5/18/09
On 5/17/09, price was at support of the TL with the 20 acting as resistance below psycho 73.00. As of 3pm NY time, price blew through the 20 AND psycho 73.00. IF price closes above these levels it is telling is something………………………….

AUDUSD 5/18/09
On 5/17/09, price was floating between S&R BUT supported by the 20. As of 3pm NY time, price used the 20 as support to attack the previous high.

CHFJPY 5/18/09
On 5/17/09, price had lost TL support and was floating between S&R lines BUT lined up with my Momentum, Momentum and Cycles. Price then took off big time, in concert with most JPY pairs UNTIL it hit the 20 acting as resistance. No PASR, just the good old 20 doing it’s job.

EURCAD 5/18/09
As above

EURGBP 5/18/09
As above

EURJPY 5/18/09
As above


EURUSD 5/18/09
As AUDUSD except also note the down TL previously acting as resistance has now been re-tested and CONFIRMED as support – I wonder if this is telling us anything?

GBPJPY 5/18/09
As AUDJPY

GBPUSD
From 3/19/09 to today the slope is up, about 45 degrees (a Gann Angle).
From 4/28/09, prices have closed above the 20 – maybe that is telling us something?

NZDUSD 5/18/09
As AUDUSD

USDCAD 5/18/09
On 5/15/09 and 5/17/09, price stalled and held down by the 20. On 5/18/09, price was firmly rejected by the 20 and sold off.

Never under estimate the value and power of the 20.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,164
  • May 18, 2009 3:33pm May 18, 2009 3:33pm
Quoting Grimweasel
Hi Strat - seems your Sun bars are worth a lot more than our UK ones that don't have the benefit of the Asian session.

My only query would be why you would take so many closely correlated trades? Do you ever forgo a trade on a pair and load up on another (ie long usdchf and short cable) or do you trade each pair solely on its merit. (ie correlation is worthless - I seem to recall you saying so before)
Remember, I am not trading the way I am teaching on here. I am a few steps further along The Path.

When everything lines up, including the JPY pairs, I trade everything regardless of correlation. Some JPY pairs move faster than others so instead of just choosing 1 JPY pair, I "diversify" across all the pairs.

I did not take EURUSD and USDCHF even though they "lined up" as I don't understand either of them right now. There was also another pair that lined up but didn't take it.

Quite simply, Danny, when it's right, it's right and JUST DO IT!
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,165
  • May 18, 2009 3:35pm May 18, 2009 3:35pm
Wow Strat you actually entered on all those pairs at the same time, while keeping your MM rules? Why not just enter one or two pairs that look the best with greater lot size?
  • #3,166
  • May 18, 2009 3:36pm May 18, 2009 3:36pm
Quoting strat
Remember, I am not trading the way I am teaching on here. I am a few steps further along The Path.

When everything lines up, including the JPY pairs, I trade everything regardless of correlation. Some JPY pairs move faster than others so instead of just choosing 1 JPY pair, I "diversify" across all the pairs.

I did not take EURUSD and USDCHF even though they "lined up" as I don't understand either of them right now. There was also another pair that lined up but didn't take it.

Quite simply, Danny, when it's right, it's right and JUST...
Thanks Strat - not a dig by any means - just curious - check PM btw.

I'm off to Bonnie Scotland this week - Isle of Mull for wildlife watching with Zero-alpha so I'll have no comms - have a great week and I look fwd to catching up on Sun eve. Good trading all!
Grim
Trade less and become more profitable!
  • #3,167
  • May 18, 2009 3:42pm May 18, 2009 3:42pm
Quoting Blackeagle
There is a potential setup forming on GBPAUD. I am not going to comment on this one, just attaching the chart and waiting for your analysis.

ps. this is not a Strat Team Trade, just something I'm watching personally.
Hello Blackeagle. I'd love to analyse you chart but I can't get it on MT4 and on Sharescope the TL and, of course the useful Weekly, Monthly TFs don't operate, it is all Daily. So I'm just looking at your chart.

I can't believe that it is as simple as it seems with a bull candle up against the TL in a strong long term DT, from which price has rebounded on previous occasions, but that in essence is all I can see. The picture is small on my screen but it looks like a BUEB right on the TL, the strong R with the 20MA just there also. All MAs are above. All in all therefore it would seem that a break upwards would need a lot of momentum to break the confluence.

From the daily chart you posted I would think the Weekly is also in a DT but the last week's bar would have been a bull bar but not 'bullish' in that it wouldn't have closed above the previous bear bars. The monthly would also be in a DT.

My decision, based on a perusal of your chart only remember, is to wait for PA on that trendline and strong R level so see if it breaks up (which I think unlikely even though it is a BUEB) and then take a short from there down to whatever the next support level is. The SL would go above the 20 probably.

I can't believe that's all there is to it because there is probably something lurking underneath the surface which I haven't seen.

Anyway my two-penny worth to get the ball rollling!
  • #3,168
  • Edited 10:19pm May 18, 2009 6:33pm | Edited 10:19pm
Quoting Naws
Wow Strat you actually entered on all those pairs at the same time, while keeping your MM rules? Why not just enter one or two pairs that look the best with greater lot size?
No, different MM rules (way different and not the way you might think). They all looked good and since they all have different volatility, trade them all. Just one of those times when everything comes together and the planets align.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,169
  • May 18, 2009 6:35pm May 18, 2009 6:35pm
Quoting Grimweasel
Thanks Strat - not a dig by any means - just curious - check PM btw.

I'm off to Bonnie Scotland this week - Isle of Mull for wildlife watching with Zero-alpha so I'll have no comms - have a great week and I look fwd to catching up on Sun eve. Good trading all!
Grim
No dig taken - didn't know you had a shovel! Seen your PM, ta very much our kid!

Make sure Zero-alpha gets plenty of haggis!
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,170
  • May 18, 2009 6:38pm May 18, 2009 6:38pm
Quoting Lotuselanman
Hello Blackeagle....
""I can't believe that it is as simple as it seems""

Trading IS simple - it is we traders that make it complicated.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,171
  • May 18, 2009 7:35pm May 18, 2009 7:35pm
I pray that one day i will have enough understanding to do what strat does.
He is a total inspiration.Nice work bro....perfect. wow.
  • #3,172
  • May 18, 2009 7:39pm May 18, 2009 7:39pm
What a beautiful thing you did......im lost for words
  • #3,173
  • May 18, 2009 7:52pm May 18, 2009 7:52pm
I feel i must have done a real bad chart posting at the weekend....sorry

The boxes are not an indicator just a highlight shape.......

and the "close but no banana" pin didnt have its close INSIDE the body of the previous bar....devils in the detail!!!

Can you see the relationship between the time frames?...And the bars?

We noted that cadyen was in a battle on the boss....and look at price.Q.E.D

look at NZYEN boss and daily can you see the same kind of story.

Reading the bars means reading the bars......it all tells a story

but you start with your ABCs and then one day you do what Strat just DID!!!
  • #3,174
  • May 18, 2009 7:56pm May 18, 2009 7:56pm
Quoting kiwi_trader
I had cause to investigate the look of pin bars/hammers in charts based on different midnights in another thread....
I just trade the bar on my screen...dont know what else to say pal
  • #3,175
  • May 18, 2009 10:17pm May 18, 2009 10:17pm
Quoting Baba G
I pray that one day i will have enough understanding to do what strat does.
He is a total inspiration.Nice work bro....perfect. wow.
It was just one of those unique moments when everything aligned and fell in place - like a total eclipse (Total eclipse of the heart - Bonnie Tyler 1984) plus I had an advantage with my momentum,and bodged up cycles and momentum cycles.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,176
  • May 18, 2009 10:34pm May 18, 2009 10:34pm
I remeber you said we should look for PA to get in on the bullish trend on this pair. Does this outside bar show valid PA to get in?

Attached Image (click to enlarge)
Click to Enlarge Name: gbpusd may 18.gif Size: 30 KB
  • #3,177
  • May 18, 2009 11:08pm May 18, 2009 11:08pm
Quoting Naws
I remeber you said we should look for PA to get in on the bullish trend on this pair. Does this outside bar show valid PA to get in?

Attachment
Yes, it's a huge BUOB on your Friday bar meaning you will have a large SL. You have psycho resistance at 1.5400 and major resistance again at 1.5650. I don't like entering after big bars because they are usually followed by profit taking.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,178
  • May 19, 2009 2:25am May 19, 2009 2:25am
Hi Strat & Team

Thanks Strat for the lessons on the 20 & Sunday bars -

As you say, we in the UK only get 2 hours of Sunday bars.

However, if I pull up D chart at 6am UK, then combining the 2 bars, will be the equivalent to 8 hrs of Asian trading..

I'm having a day off work today...so I'm going back through some charts closely...and reading a new book that's arrived..
  • #3,179
  • May 19, 2009 5:13am May 19, 2009 5:13am
Thanks for those lessons Strat. It seems so easy (that's because it is) when you give us examples. It's interpreting all this in real time that is the secret.

I think I'll look into a US feed so I can get up on Monday morning and view a decent Sunday Bar.
  • #3,180
  • May 19, 2009 6:54am May 19, 2009 6:54am
I got stopped out today at BE on the second lot.

A few things I learned (especially about me):

1. Got caught up in the PA (hammer) and overlooked the trend. Even though I recognized we were in a downtrend, I didn't plan this trade as a counter trend trade. I was just trading PA and SR without respect for the fact that the bias was down. I was blinded by the triangle (bouncing between trend lines until a breakout occurs).

2. Stuck to my plan. Even though I didn't make much on this trade, I didn't lose and didn't get stressed. I definitely made mistakes, but MM kept me from getting killed.

3. I started thinking I may have taken this trade due to some hidden greed factor, but that wasn't the case. I took it based on my analysis and calculated risk. I just didn't realize my analysis had a hole (thanks all for the feedback).
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