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Trend Trading All Pairs

  • #6,721
  • Jun 1, 2010 2:45pm Jun 1, 2010 2:45pm
Quoting randomperson
As nice as volatility is on jpy crosses, I find they are all too correlated to trade more than 1/2, if only looking at a few pairs....
thanks for your reply. Very true, they have a very high volatility. Still have to think about the best combo as well, but thank you guys for your hints. Helps me to get around this problem much faster.

cheers
  • #6,722
  • Edited 8:54pm Jun 1, 2010 8:36pm | Edited 8:54pm
Reposting this chart on a daily TF .... this still appears to be an impending high probability reversal. For a change, i have marked the chart with some vertical yellow lines starting from left to right ... I'll attempt to use the language as used in volume spread analysis to explain whats happening.

We are hitting a resistance zone.

Starting from left to right:

1-Climactic high volume with large up bar = Hidden Potential selling + Effort to Rise (as per Wycoff language)

2- Next bar confirms that selling came in on high volume and effort to rise on previous bar failed.

3- Narrow range up bar with ultra low volume = No Demand

4- Price rejection at higher than average volume - (Pin Bar / up Thrust)

5- Another no demand bar on very low volume - this would also confirm earlier no demand bar.

6- Another pin bar on higher than average volume.

So far this pair is still right on tract for a reversal. let see if & when it really starts to go down.
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  • #6,723
  • Jun 1, 2010 9:05pm Jun 1, 2010 9:05pm
This one is entering a confluence zone , resistance is up above. Right now its at 61.8 fib + RN. Looks like it will test the resistance via long on bar before reacting.

Also look at volume red bar , which is the climax volume and as we can see price pulled back about 40% ...after that bar range started shortening and volume is gradually decreasing i.e. bearish activity.

anyone looking at this one?
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  • #6,724
  • Jun 1, 2010 10:57pm Jun 1, 2010 10:57pm
Interesting read. Now question is: is this just an interesting read or useful tradeable information?
Would be great if you can post a chart in which the volume has lead you to enter a trade. Cause after all we are here to trade, not analysis per se.
anyways, quite interesting.

cheers
Quoting MktScape
Reposting this chart on a daily TF .... this still appears to be an impending high probability reversal. For a change, i have marked the chart with some vertical yellow lines starting from left to right ... I'll attempt to use the language as used in volume spread analysis to explain whats happening.

We are hitting a resistance zone.

Starting from left to right:

1-Climactic high volume with large up bar = Hidden Potential selling + Effort to Rise (as per Wycoff language)

2- Next bar confirms that selling came in on high volume and effort to...
  • #6,725
  • Edited 8:23pm Jun 2, 2010 6:01am | Edited 8:23pm
Quoting Custos
Interesting read. Now question is: is this just an interesting read or useful tradeable information?
Would be great if you can post a chart in which the volume has lead you to enter a trade. Cause after all we are here to trade, not analysis per se.
anyways, quite interesting.
cheers
Hello Custos,
When i started learning about trading stocks, i learned that volume (representing sentiments/ involving actions of professionals) is the key part of the whole puzzle of chart reading/analysis and then reaching a decision as to whether entering a particular trade has the max odds on the side of the trader. I would quote 1 book particularly, this is a 1930 classic:

1) Tape Reading & Market Tactics by Humpry B Neil (This book has given a real inside of market psychology)
http://site.fraserpublishing.com/TAREMAshort.pdf (this is a short excerpt from the book)
http://www.amazon.com/Reading-Market.../dp/0870340743

Mr Wycoff is the guru in understanding the market psychology combining PA and Volume. VSA is the extension of Wycoff work. I haven't been too comfortable in reading price action without volume as it doesn't give the additional confirmation/confidence about the underlying forces behind the PA. So when i learned that volume work in Forex as well (given its from a reliable/large broker) then i added it immediately to my charts.

So, in my opinion knowing about combining price spread provides valuable insight into professional activity aka smart money, and when it happens near the demand/supply zones i.e support / resistance confirms the bias of whats cooking and makes us better in the art of chart reading. Thats how i have always learned/known it.

Therefore volume alone wont be sole factor to enter into a trade but it will give the additional confidence in knowing that the odds are on our side as propagated by the professionals.

I took the trade on GBP CAD H4...it worked out well.
  • #6,726
  • Jun 2, 2010 6:41am Jun 2, 2010 6:41am
I use volume is futures and stocks quite well as an additional confluence. However, volume in spot forex is not accurate. It is nothing more than a tick display - i.e. display of number of trades - which is dependent on your data feed. I would not use volume in spot forex for the above reasons.
  • #6,727
  • Jun 2, 2010 7:04am Jun 2, 2010 7:04am
Quoting randomperson
I use volume is futures and stocks quite well as an additional confluence. However, volume in spot forex is not accurate. It is nothing more than a tick display - i.e. display of number of trades - which is dependent on your data feed. I would not use volume in spot forex for the above reasons.
Hello,
I have known the same info about why not use volume in forex and i havent applied it for quite some time until i came across Tom William book Mastering the Markets and some of their seminars and the VSA thread on FF.

ESignal has 200 major contributing banks and other financial institutions providing the data therefore they are the best source for volume however expensive. The VSA thread on FF there was a comparitive study done on various broker vol feeds and how it compares to eSignal (being the benchmark due to the largest contributing base) and the finding were a FXCM feed is quite close to eSignal and therefore being used.

One thing to keep in mind that in forex we are mainly interested in comparing volume bars and not necessarily knowing what the total volume. If you see the chart i posted earlier ....i believe its quite obvious as to what story volume is telling.

I changed my perspective on volume based own study, observation and knowing that professional syndicate traders such as Tom Williams also endorse it. If you like you can read Tim william eBook ....do a search in VSA thread and its there as an attachment. I am sure it will broaden understanding.
  • #6,728
  • Jun 2, 2010 7:58am Jun 2, 2010 7:58am
hm, gotta read more into that, right now I don't know what to think of volume per se.
Also, I think randomperson is right to say that we don't have complete volume information.
I just imagine this scenario. Let's say we have volume information of 70% of the market. Now goldman sachs is going in with a major order, which is not covered by our 70%. Now actually the market is on high volume, but we don't see the volume, since we don't have goldman sachs in our volume feed.
Having said that, I think it can be used as an extra confirming factor in conjunction with PA. But I guess it's up to every person to test that out for themselves.
Anyways, thanks for sharing, gonna read up on your recommended resources.
Quoting MktScape
Hello Custos,
When i started learning about trading stocks, i learned that volume (representing sentiments/ involving actions of professionals) is the key part of the whole puzzle of chart reading/analysis and then reaching a decision as to whether entering a particular trade has the max odds on the side of the trader. I would quote 1 book particularly, this is a 1930 classic:

1) Tape Reading & Market Tactics by Humpry B Neil (This book has given a real inside of market psychology)
http://site.fraserpublishing.com/TAREMAshort.pdf
http://www.amazon.com/Reading-Market.../dp/0870340743

Mr...
  • #6,729
  • Edited 8:21pm Jun 2, 2010 8:17am | Edited 8:21pm
Quoting Custos
Having said that, I think it can be used as an extra confirming factor in conjunction with PA.
Yep ...that what I am using it as and found it to be helpful.

EDIT:
I have put together some links here. Also is the link to the vol addon (Better Volume v1.4) for MT4 and its explanation docs....I hope it would be a good read.

http://cdn.forexfactory.com/attachme...7&d=1260245477
http://www.forexfactory.com/attachme...d=238959&d=Apr
http://www.forexfactory.com/member.php?u=82985
http://cdn.forexfactory.com/attachme...4&d=1241431116
http://www.forexfactory.com/attachme...d=255031&d=Jun


Just wanted to share the list of contributing banks and institutions on ESignal. See attachement. You can see the big names.
Attached File(s)
File Type: doc FOREX Contributors.doc   126 KB | 2,542 downloads
  • #6,730
  • Jun 2, 2010 10:35am Jun 2, 2010 10:35am
Any interssting level(s) to watch for?
  • #6,731
  • Jun 2, 2010 1:21pm Jun 2, 2010 1:21pm
Quoting MktScape
Any interssting level(s) to watch for?
well, those are the levels I watch for, but with a different strat now, as mentioned in the previous posts. Attached is eur/usd h1.
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  • #6,732
  • Jun 2, 2010 1:33pm Jun 2, 2010 1:33pm
Quoting Custos
well, those are the levels I watch for, but with a different strat now, as mentioned in the previous posts. Attached is eur/usd h1.
Are you watching only 5 currencies or you have increased the trading TF so that you get less signals
  • #6,733
  • Jun 2, 2010 1:39pm Jun 2, 2010 1:39pm
Quoting MktScape
Are you watching only 5 currencies or you have increased the trading TF so that you get less signals
I am watching now only 5 currencies on the h1, cause I like the "entry-frequency". Every two hours or so I get a new signal. Also, if I watched more pairs, I will get too much of the same market. Meaning, if one jpy moves down, most of the other jpy's will too.
Well, but let's see how that works out, still not so sure which pairs are the best , but gonna try a few out.
  • #6,734
  • Edited 2:19pm Jun 2, 2010 2:08pm | Edited 2:19pm
Quoting Custos
I am watching now only 5 currencies on the h1, cause I like the "entry-frequency". Every two hours or so I get a new signal. Also, if I watched more pairs, I will get too much of the same market. Meaning, if one jpy moves down, most of the other jpy's will too.
Well, but let's see how that works out, still not so sure which pairs are the best , but gonna try a few out.
Yes ..get a feel for the better ones ...espacially the non co-related, Highest liquidity and stable price action.

By the way (in case you missed it) I have added the links for the following in my previous posts:

1- Mastering the Markets -By Tom Williams
2- Better Volume Indicator - All it does it apply color to the default volume
bars in MT4 and when you'll put the cursor on the bar it will give the
description.
3- Explanation document for the above indi ... on the meaning of each bar
4- Importance of Background in Analyzing Price Action.
5- List of data contributors for eSignal

I hope you will find it useful.
  • #6,735
  • Edited 8:14pm Jun 2, 2010 7:57pm | Edited 8:14pm
A solid resistance level with 2 confluence level is up above. Anyone else watching this.

Custos , what do you think and how about the placement of limit sell and SL which i have placed on the chart?

Cheers
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  • #6,736
  • Jun 2, 2010 11:19pm Jun 2, 2010 11:19pm
thanks
Quoting MktScape
Yes ..get a feel for the better ones ...espacially the non co-related, Highest liquidity and stable price action.

By the way (in case you missed it) I have added the links for the following in my previous posts:

1- Mastering the Markets -By Tom Williams
2- Better Volume Indicator - All it does it apply color to the default volume
bars in MT4 and when you'll put the cursor on the bar it will give the
description.
3- Explanation document for the above indi ... on the meaning of each bar
4- Importance...
  • #6,737
  • Jun 2, 2010 11:26pm Jun 2, 2010 11:26pm
Quoting MktScape
A solid resistance level with 2 confluence level is up above. Anyone else watching this.

Custos , what do you think and how about the placement of limit sell and SL which i have placed on the chart?

Cheers
the limit is okay, the stop is a bit too tight, I would put it above the last high at around 0.8480. But of course then the R:R is not very favorable anymore. So you gotta decide on the trade-off, if you are willing to accept a less favorable R:R because of a bigger stop vs. a higher risk of getting stopped out because of a tighter stop.
  • #6,738
  • Jun 3, 2010 12:11am Jun 3, 2010 12:11am
I just looked around in the forex factory forum for some quality range trading threads. Quite amazingly, besides james16 there are not really good threads concerning that topic in the forum (at least I haven't found them).
Very interesting actually, since the market is ranging around more often than it is trending. Maybe range trading is just too difficult for most people, and that's why there is not more written about it.

Or do you guys know any good threads about range trading?
  • #6,739
  • Jun 3, 2010 3:12am Jun 3, 2010 3:12am
Quoting MktScape
A solid resistance level with 2 confluence level is up above. Anyone else watching this.

Custos , what do you think and how about the placement of limit sell and SL which i have placed on the chart?

Cheers
Hey dude! ye been sometime now lol. just getting back into the forum again.

Its amazing how one always remembers exactly which threads to go back to hey haha. its the quality that keeps us coming back i suppose

been busy working on a poker project and ive finally got free time for the next 4 months to polish my trading and start ramping up.

im also looking at this trade.

This is what ive got setup.

SL 35 pips just above red resistance barrier.

tp1 = 1st blue line.

tp2 = 2nd blue line = swing low + adr limit aprox...

either way its a drop if you look on the weekly with a lot of space to teh downside.

cheers

pip


PS: im fond of trendlines but i dont always use them anymore since they dont always align even though the markets trending...
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  • #6,740
  • Jun 3, 2010 3:21am Jun 3, 2010 3:21am
Quoting Custos
So, I've been working on testing a range trading methodology the last couple of days. Astonishingly, it does remarkably well.
The basic idea is:
1. Mark up the chart with S/R levels
2. When price approaches an S/R level, enter (in expection for a bounce) and put your stop behind the next (e.g. lower) S/R level and Profit target before the next (e.g. higher) S/R level.
3. If price breaks the S/R level, wait for it to hit the S/L or to retest the broken S/R level to enter now at the opposite direction and close out the losing trade.
That procedure...
hmmm....

seems very interesting.

i suppose this is the strategy you developed to trade ranges? or am i wrong in assuming this?

could you give me a visual example if you dont mind Custos?

also, with regards to range trading i think one of your safer bets would be the j16 thread.

sos cant help there

cheers

pip


EDIT: Wont the BRV thread contain range trading since its based on s/r bounces? just a thought but i imagine you've already checked it out.
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