Strat's Long Term Stress Free Trading

Failing 92 seems to have allowed a capitulation of sorts.....I like this sort of thing. In true Strat form, one should wait for appropriate PA to show a reversal; I will likely be lurking at the 89.75 area though, as the bargain shopping has been profitable, allbeit, admittedly, very frustrating. I am fighting the tide on this one, wedded as I am to a fundamanetal view that the market has not yet accepted. Perhaps stop running is at play here as well. 92 was an obvious target.

This is a nice illustration of Strat's view that technicals really do superceed fundamentals in terms of practical trading. I will be pleased (and in a new pair of shoes!) if this market eventually hits 125, but at what cost in terms of stress and trade manipulation. The technical trade has been short for some time, and that ride has been eminently easier than my path.

Interesting that today's intraday high on USDCHF is right on the 1.04. That is a sign of comfort on a profit-taking day for those long EURUSD in spite of today's emerging daily pattern. In contrast to some, I do believe that vthe byplay in these markets is a crystal ball of sorts. That view is supported repeatedly over the years.

So at 5pm my time, I am messing about on H1 on AUDJPY. I saw my DSRI broken to the downside 3 hours earlier so I added support to see where it could go.

When I look at the old Queen of Hearts this morning, I just stared in amazement - she went all the way (those were the days!).

Now, as is my want, I'm doing a post mortem on myself to understand why I didn't trade it when I saw the opportunity at 5pm. Not only this, but why I didn't check the other JPY pairs which I normally do.

After some Strat bashing, I didn't take it or pay attention to it because I was in a strange place - a place I don't understand or am familiar with - the H1 time frame. My rigid application of my rules kept me from trading H1.

Me thinks I need to take lessons!

Don't beat yourself up too much Strat, but I don't understand why you didn't take that trade either.

I was looking at the H8 and I thought it was a perfect setup - IB followed by a doji/pin - I traded the break of the doji at 79.20.

Strat asked me to write something about how what is taught in this thread can be applied across any timeframe, and my experience ‘down there’, so this is posted with his permission.

All we’re really talking about is support/resistance (supply/demand) and price action – the same core principles apply on lower timeframes as they do on the daily and for the purpose of this example, I’m going to focus on the 5M timeframe where I’ve ‘cherry-picked’ a good trade I made on Monday this week from Cable (don’t bother asking me to show a losing trade but I can assure you, there are plenty).

So it’s the first day of the week and Europe wakes up to think Cable looks cheap and piles in. Price rises sharply, testing the 1.64 round number which also happens to be in the region of the previous week’s high (near enough as makes no difference) and a strong recent level of resistance. Price then retraces to find huge supply in early London trading and shoots through 1.64 to spike at 1.6442. Price then retraces back down toward 1.64, finds a new source of supply and tests 1.6440 again where it’s rejected, retraces and tests again, and is strongly rejected again, printing dark cloud cover or a 10 min shooting star – whatever name you want to give it – it shows rejection. This is where I entered at 1.6436 with a target of 1.64 (for obvious reasons) and a stop of 10 pips.

I stuck to my target but there were numerous opportunities to join the sell off all the way down, and with New York having a day off, once London had made its mind up on direction, there was no one around to fight it.

I chose this trade in particular because I think it gives a great example of how simple s/r and a little PA is applicable across all price, regardless of timeframe.



One of the key things in my opinion to consider if you do choose to eventually drop down timeframes (and I wouldn’t recommend it until you have nailed the daily) is the importance of the three sessions, their timing, and the pairs which are most actively traded during those sessions. For example, once Europe goes home for the day there’s usually very little interest in EURJPY until Asia wakes up, whereas Dollar pairs can be traded until the end of the US session.

This is really of no consequence if you’re trading a Daily bar, although I do consider the price action on the pair at the end of its most liquid session (for instance EURJPY may, at 4.30 GMT print a hammer, but will then drift until the end of the US session, lessoning the appeal of the daily bar, but if you have read the price action throughout the day, then you can get a feel for where the people who move that particular market actually want it to go.)

Another issue I had (and continue to have) when looking at lower timeframes is the issue of finding my bearings. On the daily this is simple because your lines and areas remain in play for long time, whereas each individual day has its own geography and it’s not immediately obvious, however if you’re patient and wait for the terrain to be mapped out, as i did on Monday, you tend to stop being dizzy and you can establish your bias.

So what can you learn from lower timeframes:

1: Support, resistance and particularly (broken) trendlines work just as well. Round numbers are also important to pay attention to.
2: Liquidity is key – you don’t want to be stuck in a sideways market.
3: The textbook shape of bars is less important (IMO), of greater importance is how price actually behaves, e.g. did it reject that level, did it plough straight through the high of the day etc etc.
4: Price ‘behaves’
5: It’s f’ing hard work compared to Daily.

Conclusion: I dropped down to lower timeframes for a better risk/reward and more trading opportunities. My August was almost exclusiveley off sub-1H TF and I walked away at the end of the month with 12.4%. September has predomoniantly been daily and 4H so far and I’m showing 26% with two weeks remaining. Draw your own conclusions.

As much as I love it, I do find trading lower intraday a lot harder than daily and the evidence suggests my bottom line doesn’t improve because of it. That’s not to say it can’t be done - I know of several people who can consistantly take a lot of money out of the 5M charts and everyone trades their own belief in the market, but perhaps I’m not wired to do it.

Hey, ‘you’ve gotta go there to come back’, right?

Dan

Hi Strat

Just to clarify the setting of S/R levels.

With regard to determination of major or minor S/R, (we go back in time and looking at number of times SL or SH was there at such level), should one set it as major when SL or SH was there for example 10 times or as a minor if it was 6 times?

What if it was just once or twice but caused a major swing, or just a small swing?

Many thanks
Jideck

OMG! Are we groveling about missed trades on intraday charts? C'mon folks, this is a professional thread!

I am still trying to finish reading and understanding everything on thread, but after reading this missed opportunity I thought of a quote from a wise person:

You will NEVER, EVER miss a good trade - there is always another being set up RIGHT NOW

I am on the path of learning

""how does the above information support consideration for a sell?""

Simply by the DSRI being penetrated to the downside, Walt.

Make sure you fully understand DSRI - DYNAMIC Support & Resistance Indicator. This is constructed, in this example, from the current demand (support) points - this is the line of current demand. As soon as this is broken (penetrated to the downside), there is new supply and the dynamics have changed.

Thanks Dan. This is NOT to inspire anyone to attempt M5, just to reinforce PASR and what is being taught on this thread. For those that are going to heed my advice and do it, don't cry for me Argentina!

In addition to reinforcing PASR, make sure this is firmly embedded in your trading brain:

""My August was almost exclusiveley off sub-1H TF and I walked away at the end of the month with 12.4%. September has predominantly been daily and 4H so far and I’m showing 26% with two weeks remaining.""

He is working on M5 much harder, longer and with far more stress for ONE QUARTER THE ROI HE GETS ON THE DAILY.

Also, you have to have a special mentality and temperament ( I don't) to trade M5 and don't forget that Jacko's partner, Mark ( ex - Broker), has experienced everyone he knows trading short time frames to eventually quit in very poor health.

YOU HAVE BEEN WARNED

OK, no more about M5!

Jideck, rather than repeat over and over what has already been posted, keep reading the posts as there are some excellent posts on identifying and constructing S&R levels. If after, reading all the posts, you are still confused, then ask again.

Absolutely right, Alexandra! USDJPY causing us to get a bit testy, eh?

Lol, i HATE USDJPY but it's beginning to look cheap - although it hasn't stopped going down yet (because it hasn't started going up )

This trade is such a great example of DSRI. You didn't mention how that bearish bar was a retest of the broken DSRI line. And look where the price stopped, right at the next DSRI level! Unfortunately I didn't enter this trade because I got scared by the support level at 132.80.

And you, young man, alerted the thread to it, many posts ago. Good job!

Funny old thing, USDJPY, it just hangs around all day for days on end doing nothing much like a willie in underpants then suddenly, it jerks into life and gives you a great ride much like...............

LOL - We are not amused by USDJPY, but we are not going to let her distort our other trades. The time will come.

Oh, it starts going up...and then it goes down. You know that feeling, eh Strat????

""Oh, it starts going up...and then it goes down. You know that feeling, eh Strat????""

Ooooooh, Alexandra, you are naughty.............but I like you!

The Time has come - Billy Fury 1959

oi vey intraday talk..

as a person who scalped the 1 SECOND chart for a good while, i can safely say i will NEVER EVER put myself through that again. EVER.

.....for a good while? Is that a few minutes? lol

Z