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  • #10,361
  • Mar 2, 2010 5:04pm Mar 2, 2010 5:04pm
Hi all,


Just wanted to say thanks for the great lessons today,I should already know all these things but PLEASE keep pounding it in our heads.

I also noticed the GBP/CAD chart that was discussed a while back, looks like Dr. Joe at his finest. It went past an all time low on my data[1992] and didn't slow down a bit. It will go down till it stops!


Poncho
" I can read the left side of the chart, the right side's a Bitch!
  • #10,362
  • Edited 7:35pm Mar 2, 2010 6:02pm | Edited 7:35pm
Quoting mstandifer
I was going to save this one for Alexandra but I believe I have my confirmation:

S&P500 a perfect bearish gravestone doji. I hadn't looked at it today.

We know what the $ does when stocks go down.

Given that, it appears I'm going to have to renege on my USDJPY trade. I still have a lot to learn.

Once again, you sound like a trader, seeking to avoid the risk rather than frothing over the gains. Gravestone doji's can be a pause rather than a reversal, though.

Personally, I see the monthly candle as controlling the UDJPY market for now, and every dip into it is a good/RR opportunity for me. My time frame on this one, however, is very long, as I have said for months. Many are probably sick of hearing about this market - another good sign. I would prefer that 88.50 hold. I would still buy 84, though. The weekly continues a very positive SHS above 88.

Glad to post this in f/u to Strat's mention of controlling candles. The longer term monthly technical patterns can be read to support a run to 50 in spite of the recent bullish candle, but, again, fundamentally I don't buy that yet and will continue my efforts, as they have been successful, albeit stop/start overload, at the long side. Selling the monthly failure last March was the real technician's trade. We have ben unable, however, in the course of the year since, to hold a lower low. Why should we do it now? Are we on the brink of economic meltdown again?

All that philosophizing is nice...I stll have my hand on the ejector button with every trade. Today's close is of interest, as I mentioned last night. The early returns tonight are quite negative.

LOL - on another note, now that E/J has broken all the technical barriers, it is probably time to rally. We don't take those trades on here, though...do we?

AUD continues to impress...hmmm...perhaps the Euro boys have overshot by making Greece wag the whole Eurozone. It's not 500 BC, is it? Hmmmmmm That monthly EURUSD chart is rather satisfying...perhaps I am seeing a bargain sale again while we wait to see how far back Aussie can come?
  • #10,363
  • Mar 2, 2010 7:46pm Mar 2, 2010 7:46pm


just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp .

Anyone wanting to subscribe to my "Contrarian Price Action Signal Service" Please send me $ 97 in Loonies. You will be occasionally provided with my picks from which you can then trade in the opposite direction.

Notice the new candle reversal after the NY close. See what I mean !!
  • #10,364
  • Mar 2, 2010 8:54pm Mar 2, 2010 8:54pm
Since some of us are recently discussing the controlling candles on the big boss charts I thought I would bring up a question.

Looking at the CADJPY chart it is apparently in a downtrend if you look at it from November 2007. However, from January 2009 it has obviously been trending up.

Referring to the letters and numbers here you see that it has HH and HL over the last few months as marked with the "ABC" which I will assume until now indicates an uptrend.

The question is concerning the controlling candles. I will go through them one at a time and describe what I think they are telling.

Start out looking at candle 1.

After the point where candle 2 has broken above the top of candle 1 you would be looking only for long setups anytime after that breakout plus anytime during candle 3.

Candle 4 eventually broke below candle 3 which would then become the controlling candle that we are now dealing with. That means we should now only be looking for opportunities to go short since that break.

We will continue to only look for short setups until there is a break above bar 4 at which time we would be looking to go long, etc.

I think I understand the concept of the controlling candles, but there I am confused about how to interpret them when they appear to be going against the immediate trend on the big boss. This seems to be a contradiction if you choose to go short when the controlling candle would indicate doing so if the immediate trend is up. Would the correct action be to stand aside until the controlling candle agrees with the immediate trend?

Can someone give me some ideas on that.

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  • #10,365
  • Mar 3, 2010 12:13am Mar 3, 2010 12:13am
Quoting PistolDave
Since some of us are recently discussing the controlling candles on the big boss charts I thought I would bring up a question.

Looking at the CADJPY chart it is apparently in a downtrend if you look at it from November 2007....
Ill try and explain how i see it as far as Big Boss candles go.

While a Big Boss candle can and will control all PA within it's range I don't think we can look at the breaks of these candles as always criteria to go long or short on a lower TF because of a break of a controlling candle.

We need to be looking at the big picture that like you stated we are in an overall downtrend and we have now made a correction of that downtrend and are now running into major R at 88-90 level. Even though candle #2 is a monthly BUOB it still respected this R very well and must be noticed. Candle #3 was another attempt at the top of the range but again failed to close prices above the 89 level. After the strong rejection of price at 89 and the close of the monthly candle #3 i would be looking for shorts only until we have a strong close above 89-90 area. But as you have it marked on your chart we would be looking for a reaction at the TL you have drawn to protect any shorts.

I think the real thing to take into consideration is that the monthly chart is more for our sense of the longterm trend direction and that it cannot be traded the same as a daily chart or even a weekly chart. As Strat says boss and big boss trading is not trading it's Investing and needs to be treated much differently.

We still want our worker trades to line up with our boss and big boss trades though and i think that a short on the daily after the close of the big boss BUOB could still be warranted because of the failure to break out of the range and PA to go short on the daily TF that would back up the lack of buyers to close above the range highs. So although a big boss candle is very important we need to pay close attention to what it is telling us about the buyers and sellers in relation to the other PA around it.

I hope i didn't muddy the water trying to explain my thoughts here! I am sure Strat will have a much better follow up.
  • #10,366
  • Mar 3, 2010 4:51am Mar 3, 2010 4:51am
Quoting CrudeCraig
Ill try and explain how i see it as far as Big Boss candles go.

While a Big Boss candle can and will control all PA within it's range I don't think we can look at the breaks of these candles as always criteria to go long or short on a lower TF because of a break of a controlling candle.

We need to be looking at the big picture that like you stated we are in an overall downtrend and we have now made a correction of that downtrend and are now running into major R at 88-90 level. Even though candle #2 is a monthly BUOB it still respected this...
Thanks Dave for the post and Craig for the lovely explanation!
I thought I had this controlling candle thing understood, yet Strat's post and yours opens more posibilities. Great.

I'm posting an even longer term monthly chart to add some perspective. Even though we can say we're in a down trend, can't be sure that all has been said about it.

Also that resistance that I have plotted at 89.73 coincides with the 38.2 fibo of the previous down move. Price is banging it's head against both. As Dave said, making HL in the process,yet not VERY HL, as the trend line shows. So trades within the range/controlling candles could go either way, short being favoured.

Weekly shows a BEOB, which also could control this bit of the range. So, it's control within the control .

And Worker is at the Italian restaurant eating tagliatelli with the MAs, which being all packed together could mean action soon, sadly in the middle of the range and if short, straight into support.

Yet that's not the issue being discussed here I think, but the controlling candles. I hope we will hear/discuss more about this, as I don't fell I completely have the grasp of it. Probably simpler that I make it.

Spinner
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Spinner 'Tis in the Waiting.....
  • #10,367
  • Mar 3, 2010 8:41am Mar 3, 2010 8:41am
Although this is a belated, I thought I'd post it all the same. This thread has been an incredible learning experience for me and it has had a huge effect on my trading.

I trade pennies and half pennies (since I still have my training wheels on) and have placed 3 trades this year to first S/R. I am quite happy with this as although I have missed many good trades (my baby girl keeps me busy now that she can walk) I am absolutely loving the fact that I can peek at a chart when I get the chance and see if there is anything that knocks my socks off.

Last year I was down $10 and I have now got $1.50 of that back. I am starting to be more confident when I place a trade or decide not to take a trade. However, I still have boatloads to learn about PA. The last 20 or so pages of this thread are truly amazing. Just when I think it can't get any better than this, Strat and company post more information to make me think; wow it can!

I plan to trade a real account within the next year or so after I have convinced myself (and the wife) that I can take the training wheels off as per Strat's suggestions.

I would like to thank everyone on here for making a difference to my trading life and wish everyone on the thread a happy one year birthday. Cheers!
Finally out of the shadows.
  • #10,368
  • Mar 3, 2010 9:27am Mar 3, 2010 9:27am
Quoting Alexandra
Once again, you sound like a trader, seeking to avoid the risk rather than frothing over the gains. Gravestone doji's can be a pause rather than a reversal, though.

Personally, I see the monthly candle as controlling the UDJPY market for now, and every dip into it is a good/RR opportunity for me. My time frame on this one, however, is very long, as I have said for months. Many are probably sick of hearing about this market - another good sign. I would prefer that 88.50 hold. I would still buy 84, though. The weekly continues a very positive SHS...
Personally, I see the monthly candle as controlling the UDJPY market for now,

Exactly. The Dec 09 candle is THE controlling candle and in fact exhibits a bull flag.

So if the flag pole theory holds true, when this breaks we should get a nice run up to 100 or so which would be very nice for BOJ (and me!)
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,369
  • Mar 3, 2010 9:29am Mar 3, 2010 9:29am
Quoting gaf
Although this is a belated, I thought I'd post it all the same....
Thank you for your kind words - much appreciated
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,370
  • Mar 3, 2010 9:40am Mar 3, 2010 9:40am
Thanks for the clear explanation Craig.

Here is what I think I have the confusion about:

Quote
i think that a short on the daily after the close of the big boss BUOB could still be warranted because of the failure to break out of the range and PA to go short on the daily TF that would back up the lack of buyers to close above the range highs.
If I am understanding you correctly, you are saying that it would have been reasonable to trade a short setup here if it had occurred in the area of 88-90 regardless of the BUEB (bar 2) because of the major resistance there.

I'm not trying to find fault with your explanation, but it would go in direct opposition to the concept of the controlling bar idea, I think. So, in this case the PASR would be reason enough to indicate going short regardless of the appearance of the controlling bar indicating that a leg up is occurring.

PASR on the worker would override the previous BUEB (bar 2)?

This is the problem I have had in understanding the concept: If you were to wait until the controlling bar has been broken to one side or the other then many times the swing would have been nearly over and most times there would not be a low-risk setup. So I don't understand how it is to be used.

There must be something I'm missing about how the controlling bar indicates direction of price.

Again, I do appreciate the help.
  • #10,371
  • Mar 3, 2010 9:46am Mar 3, 2010 9:46am
Quoting Lou


just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp .

Anyone wanting to subscribe to my "Contrarian Price Action Signal Service" Please send me $ 97 in Loonies. You will be occasionally provided with my picks from which you can then trade in the opposite direction.

Notice the new candle reversal after the NY close. See what I mean !!
just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp

But why, Lou?

On Feb 19, PRICE closed STRONGLY above the 20. PRICE continued to close ABOVE the 20 ever since. Then on Feb 25, another STRONG close above the 50.

Draw your TL from the high of Jan 12 to the high of Feb 11 and you will see that on Feb 19 PRICE not only BROKE through it but closed STRONG above it. Then on Feb 22 & 23 came the RE-TEST of the TL as SUPPORT.

Even my one legged blind, deaf and dumb old man with asthma knew to go long here.

Lou, this is very worrying, more so if you have been trading for 10 years.

Are you sure you really UNDERSTAND trading?
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,372
  • Mar 3, 2010 10:02am Mar 3, 2010 10:02am
Quoting CrudeCraig
Ill try and explain how i see it as far as Big Boss candles go.

While a Big Boss candle can and will control all PA within it's range I don't think we can look at the breaks of these candles as always criteria to go long or short on a lower TF because of a break of a controlling candle.

We need to be looking at the big picture that like you stated we are in an overall downtrend and we have now made a correction of that downtrend and are now running into major R at 88-90 level. Even though candle #2 is a monthly BUOB it still respected this R very...
Great explanation and good UNDERSTANDING young Craig!
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,373
  • Mar 3, 2010 10:15am Mar 3, 2010 10:15am
EURNZD looks to be making a move above the downtrend line that started about a year ago. It may not do much since there is some strong resistance at 2.000 but it has put in a triple bottom and might provide some interesting action soon, so it's worth keeping an eye on.

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  • #10,374
  • Mar 3, 2010 10:56am Mar 3, 2010 10:56am
Quoting PistolDave
Since some of us are recently discussing the controlling candles on the big boss charts I thought I would bring up a question.

Looking at the CADJPY chart it is apparently in a downtrend if you look at it from November 2007....
Dave, your fundamental problem is that you are trying to trade the Big Boss.

Trading the Boss and Big Boss requires different (advanced) PASR strategies and VERY DEEP pockets.

We use the Boss and Big Boss as our GPS – our direction finders.

A quick recap:

We want to trade the Worker in the direction of the Boss and Big Boss. Ideally, we want to enter a trade when the Worker changes into the direction of the Boss at the same time as the Boss changes into the direction of the Big Boss. When you can time this, PRICE is sat on the launch pad!

Let me see if I can put you straight on your interpretation and reasoning:

Start out looking at candle 1.

After the point where candle 2 has broken above the top of candle 1 you would be looking only for long setups anytime after that breakout plus anytime during candle 3.

My first observation is that you are looking in the wrong place. You should be looking at the candle preceding candle “A”. This is a hammer which confirms support at 79ish and resistance at 88ish.

Also remember that on these higher time frames you will see over runs which are the actions of over runs on the Boss or Worker or both.

Also, remember which is the most important PRICE on a candle or bar.

That hammer in July 09 is THE controlling candle (ignore over runs)

This tells us that UNTIL its extreme PRICE levels are taken out by the most important PRICE on a candle or bar, we should expect PRICE to move up and down within that candle.

Candle A is confirming the next resistance at 90ish and at 88ish. The body of candle A is basically within the body of the July hammer.

The 3 candles after candle A are all IBs of the July hammer – the controlling candle.

The most important PRICE of candle 1 was firmly repelled by the 79ish support still within the controlling candle telling us that the 79ish PRICE is very strong support.

We now have PRICE firmly bounded by the two ranges which are evident on the lower time frames.

At this point, we would expect a test of support before PRICE moves higher within the range. The test never came as the buyers were anxious to push PRICE higher on candle 2.

Now, look at where PRICE stopped on candle 2 – another confirmation of SR and the range.

Candle 3 duly obliged with PRICES within the range but the sellers could not get past 84ish as buyers moved in at that PRICE.

Candle 4 was the Battle of the Sellers and Buyers with the buyers coming out on top.

Candle 5, our current month shows the buyers picking up where they left off – buying BUT still well within the SR range AND the controlling hammer.

Your up TL is correct and shows the extreme PRICES of the sellers.

You should see that as each month progresses, the sellers are being fought back with higher prices as evidenced by the wedge formed by the up TL.

This rising wedge tells us that the buyers are getting stronger as they are able to repel the sellers at higher prices. As yet though, there are insufficient buyers at the 88-90ish levels to push PRICE higher.

What usually, but not always, happens is a break out to the upside of a rising wedge with a TP equal to that of the depth of the wedge.

Don’t take the definition of a rising wedge at face value as the Big Boys often like to “play” with us and give us false break outs. Instead, “see beyond the candles” and UNDERSTAND what is going on between the buyers and sellers.

Now, all that has been done on the Big Boss. It has not been done to trade the Big Boss but instead to give us direction for the Boss and Worker.

Apply your UNDERSTANDING of the Big Boss to the Boss and do the same exercise again. Then apply the UNDERSTANDING of the Boss to the Worker and it should be very clear what to do.

I’m not sure if this answers your specific concerns but if not “fire” away again!

15 YEARS OF PASR ON FOREX FACTORY!
  • #10,375
  • Mar 3, 2010 10:57am Mar 3, 2010 10:57am
Quoting PistolDave
EURNZD looks to be making a move above the downtrend line that started about a year ago. It may not do much since there is some strong resistance at 2.000 but it has put in a triple bottom and might provide some interesting action soon, so it's worth keeping an eye on.


Attachment

Yeah, the boss 20 is still in control. A strong close on HH, will look closely at worker.
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  • #10,376
  • Mar 3, 2010 11:06am Mar 3, 2010 11:06am
Ugly price action with the aud/jpy. It seems to be favoring the bears
Annoying Precision
  • #10,377
  • Mar 3, 2010 11:15am Mar 3, 2010 11:15am
Quoting Spinner
Thanks Dave for the post and Craig for the lovely explanation!
I thought I had this controlling candle thing understood, yet Strat's post and yours opens more posibilities. Great.

I'm posting an even longer term monthly chart to add some perspective. Even though we can say we're in a down trend, can't be sure that all has been said about it.

Also that resistance that I have plotted at 89.73 coincides with the 38.2 fibo of the previous down move. Price is banging it's head against both. As Dave said, making HL in the process,yet not VERY HL, as...
Between the Italian Restaurant and the single malt you didn’t mention, I got a bit lost. Spinning yarns is obviously what you do best although I hope the woolen ones are better than the verbal ones!

Seriously though, I hope my reply to the Duck Shooter helps. Also, you should be able to draw a nice channel on that chart.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,378
  • Mar 3, 2010 11:20am Mar 3, 2010 11:20am
Strat,

I was wondering what pairs you trade because I'm sure you've assimlated a set based upon correlation and such.

Thanks
Annoying Precision
  • #10,379
  • Mar 3, 2010 11:26am Mar 3, 2010 11:26am
Quoting PistolDave
EURNZD looks to be making a move above the downtrend line that started about a year ago. It may not do much since there is some strong resistance at 2.000 but it has put in a triple bottom and might provide some interesting action soon, so it's worth keeping an eye on.


Attachment

Yeah I'm watching this one too. The NZD isn't looking too pretty today.
  • #10,380
  • Mar 3, 2010 11:29am Mar 3, 2010 11:29am
Quoting PistolDave
EURNZD looks to be making a move above the downtrend line that started about a year ago. It may not do much since there is some strong resistance at 2.000 but it has put in a triple bottom and might provide some interesting action soon, so it's worth keeping an eye on.

Attachment

I don't have this pair but it is made up of EURUSD and NZDUSD. Since both these are looking for direction, I wouldn't therefore trade a composite of the two so yes something to watch when PRICE is at SR levels.
15 YEARS OF PASR ON FOREX FACTORY!
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