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The Price Action 'Anomaly'

  • #41
  • Edited 8:38pm Sep 1, 2009 4:46pm | Edited 8:38pm
Still in demo, but thought I'd post this, looks like the price came within a few pips of my TP before pulling back, so moved my TP above the open red star. See the last 4hr candle tail?

Don't know if this star's destiny has been fulfilled yet, but sure looks like it came close.
jacson101 or CatP doesn't the candle price have to close below the red star for it to count,
candle wicks don't count correct?

FxDaily Plus still looking for price to fall further than it already has, only time will time.

Looks like I switched threads in the nick of time again, FrankePip's thread C4 for poor traders, is now in the recycle bin too.


Was a long await for a few pips.
Now price will probably fall like a rock tonight since I opened a buy position earlier.

Don't think the red star's distiny has yet been fulfilled yet.
Shows up on both 4 hr & daily chart @ 131.82.
Using new clean install of Alpair UK demo.
Had too many indis in other folder & easy way to keep track trading & when testing two separate systems.


If you scalp the 5 min which seems to affect your trading with the trend the most overall?
15min, 30min, 1hr, 4h, day, week, or month?
Asking because it seems the weekly candle is the most dominant tonight on e/y, but there is a lot of downward momentum on the other yen pairs as well if dailyfx+ is still right.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: pa stars 7.gif Size: 30 KB
Click to Enlarge Name: pa stars 8.gif Size: 32 KB
  • #42
  • Edited 9:25am Sep 2, 2009 8:59am | Edited 9:25am
Quoting 45Fxguy
Still in demo, but thought I'd post this, looks like the price came within a few pips of my TP before pulling back, so moved my TP above the open red star....
Hi 45,
Everyone trades P.A a bit different. Again, it is what makes sense and what is comfortable to you, nothing more. And by no means should you be following what I or anyone says blindly without doing at least some homework.

Cat has prepared very detailed info in his earlier post. Best to start with that,there.
Can't really go wrong with that info.
Thanks Cat


Attached chart for Papion
USD/JPY 4hr
Don't ask me how long this will take but, I'm starting to aggregate some of the 'ask', little by little
94.688/95.341/97.27/98.50....

Have fun.
Attached Image (click to enlarge)
Click to Enlarge Name: $jpy acc.gif Size: 26 KB
  • #43
  • Sep 5, 2009 9:23am Sep 5, 2009 9:23am
Quoting 45Fxguy
Thank you for the homework Cat Preacher,
This should go a long way in helping me become a full time day trader.
I just see a blank window with the ATR in Pips.mq4 indi.
Looks the same on all time frames, any ideas?
The pdf files found at link above, are very clear & makes it all much easier to understand.
Thanks again.
Hi 45Fx,

Been very busy at my other work this week, not enough time for Forex, unfortunately. May be that way for the fall, the way things are going. Will contribute as I find time.

The ATR in Pips.mq4 should be placed on a window below the main window. I do not understand why that is necessary, as I am still learning to code in mt4. Hope that helps.

Best wishes,

Cat Preacher
  • #44
  • Sep 5, 2009 9:53am Sep 5, 2009 9:53am
http://www.forexfactory.com/attachme...5&d=1251809656
Quoting 45Fxguy
Looking at this chart with your indicator, what would you do next?
Seeing as you have the Market Profile chart on an M15 chart, let's take a look at where I would take profit. (BTW, Market Profile was designed for the M30 timeframe, but ok to use it on smaller time frames)

First, at the far right, price has reached a major support area as shown by the 2 sets of blue dots to the left (fractal lows). We don't know which way price will go, either up or down. What should be our major targets?

Price has recently blasted through several other major support areas, and now is regathering strength for the next phase. If it breaks current support, I would set a target for the area around the red bearish reversal candle at the far left of the screen (using the price anomaly theory that this has been unfulfilled and seems from the chart to be the next major support area - no stars in the support area in between).

However, if price fails to break through this support area, then I would look to place my TP at around 1.3370, as that would follow Market Profile teachings that if it breaks through the bottom of the 70% band around the
high of the nearest fractal above current price, it will travel to the other side of the 70% band, around 1.3370. In all probability, I would place my TP at the blue or red candle just below the prior resistance in that area, just above where it says Strong Pivot Reverse.

Hope that helps with some thinking of Price Action. If you want some links or pdf's of market profile, let me know.

Best wishes,

Cat Preacher
  • #45
  • Sep 5, 2009 10:15am Sep 5, 2009 10:15am
Quoting jacson101
Hello folks,
I decided to start this thread for one simple reason. I would like nothing more than an honest to goodness explanation,the 'why' if you will.
Having spent that past several months live trading this 'anomaly' with varying techniques on various time frames, all have been successful, some more than others.
The majority of my trading time and earned pips with this indi. were in the higher volatility pairs including gbp and gbp crosses.

Over the course of the past several months I've made some refinements to my own personal R:R scheme...
Thank you for this thread.
Let me see if i understand this correctly: Once a red star is formed it becomes a target? Does the bar become a target or just the location of the red star?

If price is below the latest red star formed we would wait for the scalper signal to form so it points in the direction of the red star and use the star as our target?

Thanks again
  • #46
  • Sep 5, 2009 12:33pm Sep 5, 2009 12:33pm
Quoting RickW00716
Thank you for this thread.
Let me see if i understand this correctly: Once a red star is formed it becomes a target? Does the bar become a target or just the location of the red star?

If price is below the latest red star formed we would wait for the scalper signal to form so it points in the direction of the red star and use the star as our target?

Thanks again

Hi Rick,

I'm talking the entire bar, I target the other end of the bar at which price has not yet closed.
Regardless of whether these bars print as bearish vertical or bullish vertical, price has had an extreme tendency to'close both ends of these 'decision bars'.
Swingman's scalper signals are customizable and have been useful, to me. There may very well be an easier way to find the opportune time to swing trade these vertical bars.



Hope this helps.
  • #47
  • Sep 5, 2009 12:37pm Sep 5, 2009 12:37pm
Quoting CatPreacher
Seeing as you have the Market Profile chart on an M15 chart, let's take a look at where I would take profit. (BTW, Market Profile was designed for the M30 timeframe, but ok to use it on smaller time frames)

First, at the far right, price has reached a major support area as shown by the 2 sets of blue dots to the left (fractal lows). We don't know which way price will go, either up or down. What should be our major targets?...
Some more info; attached euro/jpy daily, to illustrate a 'clean move'.
The rapid appreciation in yen we experienced last year was for the most part 'clean' against most currencies including the euro.
A 'VaR' break occurred .03% of the time and, this predominantly happens in parabolic markets.

Thanks for all your input, C.
Attached Image (click to enlarge)
Click to Enlarge Name: eurjpy acc.gif Size: 14 KB
  • #48
  • Edited 1:20pm Sep 5, 2009 12:45pm | Edited 1:20pm
Quoting CatPreacher
http://www.forexfactory.com/attachme...5&d=1251809656

Seeing as you have the Market Profile chart on an M15 chart, let's take a look at where I would take profit. (BTW, Market Profile was designed for the M30 timeframe, but ok to use it on smaller time frames)

First, at the far right, price has reached a major support area as shown by the 2 sets of blue dots to the left (fractal lows). We don't know which way price will go, either up or down. What should be our major targets?

Price has recently blasted through...
Thanks Cat Preacher,

Here's how it played out.
Yes, please post instructional pdfs, or links to the market profile indi info.
Glade someone here knows how to use it.
Got side tracked last week working on my own version of Nitro/Renko, but back to practicing using the PA indi etc again this weekend in the back-test simulator.
A goal I've set for myself is 10 consecutive wins in a row, which isn't easy, but think it is doable with a little more practice, I'm getting closer.
Switching to uy since has 1/2 the spread, & only scalping 3 pips at a time may make reaching that goal easier.

Update: Reached my 10 practice wins in a row exercise today!
Attached Image (click to enlarge)
Click to Enlarge Name: pa stars 9.gif Size: 40 KB
  • #49
  • Sep 5, 2009 1:49pm Sep 5, 2009 1:49pm
Quoting 45Fxguy
Thanks Cat Preacher,


Update: Reached my 10 practice wins in a row exercise today!
This means I can go on an official vacation now.
Great work 45!
  • #50
  • Sep 5, 2009 2:30pm Sep 5, 2009 2:30pm
Quoting 45Fxguy
Thanks Cat Preacher,

Here's how it played out.
Yes, please post instructional pdfs, or links to the market profile indi info.
Glade someone here knows how to use it.
Very glad to help out. Here are some links and pdf's I have found helpful on understanding this. With just this alone, there is a lot to learn, but the basics are that Market Profile shows you where the bulk of the trading has been, using the M30 charts. You work from the point where the bulk is the biggest, and either eyeball or calculate where about 70% of the bulk occurs. If price is outside that section, if it pierces into the 70%, and remains at the close of a M30 bar, you have an 80% chance for it to go to the other side of the 70%. This was developed by a trader on the Chicago Board and is used by professional bank traders.

http://www.mypivots.com/forum/default.asp?CAT_ID=4

Here is a Market Profile online calculator:
http://www.mypivots.com/calculators/...alculator.aspx

And another link:
http://www.traderslaboratory.com/for...ew-3605-3.html

And a link to one of many MT4 indicators:
http://www.traderslaboratory.com/for...form-5668.html

Try not to get bogged down using Market Profile. While good, if you are a scalper, it is really designed for the M30 and above time frames.

I have a pdf, but it is too big to upload, so google "A_Six-Part_Study_Guide_to_Market_Profile.pdf" and download it.

While I have more, that should be enough to get you started.

...
Quoting 45Fxguy
A goal I've set for myself is 10 consecutive wins in a row, which isn't easy, but think it is doable with a little more practice, I'm getting closer.
Switching to uy since has 1/2 the spread, & only scalping 3 pips at a time may make reaching that goal easier.

Update: Reached my 10 practice wins in a row exercise today!
Good going! Now you can teach us, and we can live off of you!

Best wishes,

Cat Preacher
Attached File(s)
File Type: pdf Anatomy_Handout.pdf   489 KB | 1,581 downloads
File Type: pdf Capital_Flow_Software-An_Introduction_to_Market_Profile.pdf   116 KB | 576 downloads
  • #51
  • Sep 5, 2009 2:46pm Sep 5, 2009 2:46pm
Quoting 45Fxguy
Think I can finally trade better now than my counter trend trading ea.
Which has been my goal for a while now.
Great goal. Glad to see you growing as a trader.

Quoting 45Fxguy

Yellow star still mid way between two support & resistant lines.
Also red star on 1 hr chart @ 132.95
Red line should start to run again soon.

New yellow star formed on 4 hr chart at 132.79 so looks like it's going to be a battle between red star on 1 min chart @ 133.25 & yellow star chart on 4 hr.
The yellow star IS its own support and resistance area, on the time frame you are on. For example, if trend is down, and star is below the wick, entry would be above the top of the candle where the star formed. If it penetrates the downside of the candle, then it is a failed reversal, and is in itself now a valid entry as a continuation pattern, continuing the direction of the downtrend. Thus this, as ALL the patterns we are studying here, can either be reversal patterns and continuation patterns based on the formation. They create their own support and resistance, and can be used on any time frame as such. They narrow previous locations of support and resistance, and thus allows you to get into trades sooner. Entry on one side, SL on the other side, reducing risk, and allowing you to get into the trade earlier.

So they are not just targets, but levels of support and resistance. Find either

 

  1. Prior fractals for support or resistance, or
  2. One of the patterns we are studying for support and one going the other way for resistance.

Whichever is closer, use those. This is one of the great advantages of using pure price action to trade.

Best wishes,

Cat Preacher.

  • #52
  • Sep 5, 2009 3:10pm Sep 5, 2009 3:10pm
Quoting RickW00716
Thank you for this thread.
Let me see if i understand this correctly: Once a red star is formed it becomes a target? Does the bar become a target or just the location of the red star?

If price is below the latest red star formed we would wait for the scalper signal to form so it points in the direction of the red star and use the star as our target?

Thanks again
This depends on how long it has been since the red bar formed. If within about the last dozen bars, and if it is the closest star in the direction you wish to go, then yes, use the far end of the red star as the target to take some profit. If greater than about a dozen bars, on almost any time frame, there are probably at least one or two other stars that could be used as targets. Use them first, and if the trend consolidates in a minor reversal then continues in the direction of the red star, use that as a take profit point.

I say a dozen bars, as on a M5 chart, anything beyond about an H1 bar is ancient history, and too far away to really help on the time frame. General rule of thumb is look at time frames from 3-6 times the time frame you are on for guidance. That means for the M5, the M15 and M30 are the time frames you want to concentrate on, and the H1 is already pretty old news.

Hope that helps.

Best wishes,

Cat Preacher
  • #53
  • Sep 5, 2009 4:07pm Sep 5, 2009 4:07pm
Have to leave shortly but here's the simulator.
I put the install instruction pdf file in the same zip.
Someone posted it on the old c4 thread.
Thought this might be a safer place to store it since it's in the bin.

If you know how to run back test on ea's shouldn't take you long to learn how to use it.

You have to open trades with it's scripts while in strategy tester.
Attached File(s)
File Type: zip Trade_Simulator_Installer.zip   453 KB | 524 downloads
  • #54
  • Sep 5, 2009 9:31pm Sep 5, 2009 9:31pm
Quoting jacson101
Hey Q,


Hope the beach is treating you well
My best,
Things are fabulous at the beach...even better now to see your thread on the move...looking forward to being part of it!
Q
The Only Constant Is Change!
  • #55
  • Edited 7:10pm Sep 6, 2009 3:15pm | Edited 7:10pm
Here is what ten straight wins looks like in the simulator.
In the zip file you'll find my last template I was playing with over the weekend to get there.
Kind of a combination of what I've learned from the c4 threads, with the icing on the cake being the PA stars.
I post it for whomever wants to back or demo forward test it this week.
I generally trade with the EMA 48 trend unless price is 40 to 50 pips away from it then PA tends to be drawn back towards it like a magnet.

I included in the zip file the ea to move SL & TP via the mouse, which works in the simulator too. That one goes in the ea folder. Although think I'd rather use the multi-trade managing ea in forward demo test.

It doesn't look bad on Renko 3 to 5 pip bricks either, maybe I'll get to try it when the market starts back up again in about half an hour.

Does anyone know if there is a thread, website, or indicator yet that tries to predict or help find the pair with the greatest pip potential of the day?

http://www.forexfactory.com/sentiment.php
Attached Image (click to enlarge)
Click to Enlarge Name: pa stars 10.gif Size: 79 KB
Attached File(s)
File Type: zip PA HG Test.zip   92 KB | 500 downloads
  • #56
  • Sep 7, 2009 10:29am Sep 7, 2009 10:29am
Quoting 45Fxguy

Does anyone know if there is a thread, website, or indicator yet that tries to predict or help find the pair with the greatest pip potential of the day?

http://www.forexfactory.com/sentiment.php
I've been thinking about what you ask in your question. There are several ways to answer that.

 

  1. volatililty of pairs as found at http://www.mataf.net/en/tools/forex-volatility would give you a good idea of what has been moving in the last x hours. That should help find the best during the day.
  2. Part of that depends on when you trade. Certain sessions have pairs with greater likelihood of making big swings during those times. Attached is what I can find in my files to help guide you.
  3. The other factor is correlation between pairs. If one is trending down (eg, jpy) and another has been trending up (eg, usd), then high probability that the usdjpy would be the best. If the price of oil has been moving up or down significantly, then cadjpy would be the natural choice as Canada is one of the largest exporters of oil and Japan is the largest importers of oil among the major currencies. To find what has been moving recently, you can look at http://www.mataf.net/en/tools/correlation-table, or http://fxtradeinfocenter.oanda.com/c...elations.shtml or http://www.dukascopy.com/swiss/engli...tch/sentiment/ or http://www.forexhit.com/analyze-fore...relations.html
  4. Here is a thread or two about indicators: http://www.forex-tsd.com/indicators-...-heat-map.html and http://www.forexfactory.com/showthread.php?t=107119 or http://www.forexfactory.com/showthread.php?t=163158

Hope those links help you to begin your quest to develop your own plan.

Quoting 45Fxguy
Here is what ten straight wins looks like in the simulator.
In the zip file you'll find my last template I was playing with over the weekend to get there.
Kind of a combination of what I've learned from the c4 threads, with the icing on the cake being the PA stars.
I post it for whomever wants to back or demo forward test it this week.
I generally trade with the EMA 48 trend unless price is 40 to 50 pips away from it then PA tends to be drawn back towards it like a magnet.

Could you go into greater detail in how you use your indicators in your individual trades? Thanks.

Best wishes,

Cat Preacher
Attached File(s)
File Type: pdf 4X_Time_Activity_Chart.pdf   42 KB | 1,525 downloads
File Type: pdf Best Time to Trade.pdf   156 KB | 3,544 downloads
File Type: pdf Best Times to Trade the Forex Market.pdf   97 KB | 31,952 downloads
File Type: pdf Forex_Traders_Cheat_Sheet.pdf   321 KB | 626 downloads
File Type: pdf ForexMarketsTiming.pdf   62 KB | 573 downloads
File Type: pdf mkt hrs.pdf   64 KB | 699 downloads
File Type: pdf what are the best times individual.pdf   312 KB | 826 downloads
  • #57
  • Edited 1:47pm Sep 7, 2009 11:55am | Edited 1:47pm
Hello Cat Preacher,

Thanks for all the info, a lot more to digest.
Below is a possible long trade example on uy m5 chart.
First signs price is on a continued upward move @ 1:45 the Ind-Fractals-LA indi shows a M15 slight reversal in PA, bottoming out if you will, & RSI candle is also marking it with the green center line, & price is moving up with and away from the EMA 45 line, plus the momentum line is moving up above the top red horizontal line of the BarScalper MACD..
iMax3alert is the trigger, if there is a sudden reverse signal of any of the above I'd probably cut my losses or TP, & exit the trade early.
Or if the upward trend continues would follow the parabolic SAR, EMA 48, RSI candles to ride trend as long as possible before getting a reverse signal from iMax3alrert etc.
In this example trade I probably would have exited with 5 pips or less since momentum is cutting back below the red horizontal lines of the BarScalper MACD indi, but chart history shows the trade would have been good for at least 10.
Didn't trade this morning, stayed up too late trying some different RSI indi & templates.
That why I'd added the RSI candles this morning to help me stay in the trends longer to try & improve my R:R.
If your only going after 3 pips & risking 30 doesn't take a math genius to know that one loss will wipe out your previous 10 wins.
Think I found the RSI candles on TSD someplace, I don't see the source code right now, if I find it will post it too.
& I Don't trade when the EMA 48 is flat lined.
Attached Image (click to enlarge)
Click to Enlarge Name: pa stars 12.gif Size: 34 KB
Attached File(s)
File Type: ex4 RSI Candles.ex4   4 KB | 473 downloads
  • #58
  • Sep 7, 2009 12:12pm Sep 7, 2009 12:12pm
Quoting 45Fxguy
Hello Cat Preacher,

Thanks for all the info, a lot more to digest.
Below is a possible long trade example on uy m5 chart.
First signs price is on a continued upward move @ 1:45 the Ind-Fractals-LA indi shows a M15 reversal in PA, & RSI candle is also marking it with the green center line, & price is moving up with and away from the EMA 45 line, plus the momentum line is moving up above the top red horizontal line of the BarScalper MACD..
iMax3alert is the trigger, if there is a sudden reverse signal of any of the above I'd probably cut my losses...
Thanks for the explanation. Will explore these indi's and see what they do. Lots for me to digest too. How are you using the price action indicators? I must have missed your explanation of that with your other indicators? Or have you decided to use indicators alone?

Best wishes,

Cat Preacher
  • #59
  • Sep 7, 2009 12:27pm Sep 7, 2009 12:27pm
Quoting CatPreacher
Thanks for the explanation. Will explore these indi's and see what they do. Lots for me to digest too. How are you using the price action indicators? I must have missed your explanation of that with your other indicators? Or have you decided to use indicators alone?

Best wishes,

Cat Preacher
I'm still using the Red Stars, been finding the blue to be much less reliable on the 5 min. Just wasn't one on the chart to use with the trade in the example.
Often times a red star will appear after I enter a trade giving me the confidence to let the trade run a little longer than normal if necessary for it to come into profit.
But think it's sometimes good idea to ignore them if they are like you said 12 candles in the past.

One more website I'd add to your list which I find very usefully for those with access to FX Daily Plus.

I especially like their SSI report:

Intraday Highlight:
USDJPY - The ratio of long to short positions in the USDJPY stands at 3.03 as nearly 75% of traders are long. Yesterday, the ratio was at 4.26 as 81% of open positions were long. In detail, long positions are 7.1% lower than yesterday and 16.0% stronger since last week. Short positions are 30.6% higher than yesterday and 23.5% stronger since last week. Open interest is 0.0% stronger than yesterday and 29.7% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.
  • #60
  • Sep 7, 2009 1:11pm Sep 7, 2009 1:11pm
Quoting 45Fxguy
I'm still using the Red Stars, been finding the blue to be much less reliable on the 5 min. Just wasn't one on the chart to use with the trade in the example.
Often times a red star will appear after I enter a trade giving me the confidence to let the trade run a little longer than normal if necessary for it to come into profit.
But think it's sometimes good idea to ignore them if they are like you said 12 candles in the past.

One more website I'd add to your list which I find very usefully for those with access to FX Daily Plus.
I have used DaillyFX.com before, and like their way of putting 2 or more currencies on the same chart, if you go from the main page to "Charts" at the top, select any of the currencies in the quote box at the top right of the page, choose "instruments" and select your currency if not already on screen, then right click on the screen, and use either "Overlay" or "Relative to" to get a chart that allows you to see two currency crosses at once. Very useful if you are trying to determine which is a stronger currency.

Best wishes,

Cat Preacher
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