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Silent Service Method

  • #10,321
  • Aug 11, 2010 11:29am Aug 11, 2010 11:29am
Quoting Sutts
Thanks for the help Arfer....
Ok, I will try not to make this confusing....lol

I don't use fractals. On purpose that is. Of course, but it's very definition, a pinbar is usually a fractal.....

As far as getting the levels correct, just know that they are almost always at a place that ends with "00" or "50". For example, 1.3000 in EUR/USD. 1.2500 was before. Anything else could be a minor area, but your entries should ALWAYS be at major levels.

Minor areas can be used to tuck stops behind, but truthfully, over time - you will find the less trades you take, the better your results will be.

Do an experiment.....try placing a line on the weekly charts every 500 pips and see what you get. Start with parity, and go up 500 and draw another line. (Just about any pair will do, but the Majors are best for this.) You will find it uncanny how simple it is. If price isn't at one of those numbers/lines - it's not worth getting involved in 99% of the time.
  • #10,322
  • Aug 11, 2010 11:32am Aug 11, 2010 11:32am
Quoting jharvey407
I seem to be finally learning how this method works. After having trouble spotting the good signals during the the last couple of months, I have managed to turn things around.

I have taken what I have learned here, namely;

Trend
S/R
Patience

And combined it with what I have studied before;

MA's
Multi-Timeframe Analysis

And I seem to have come up with a winning formula.

For me learning CW's method was a huge step in the right direction, but I was having trouble understanding which of the signals were the most likely to produce a reasonable...
For those of you that are not in my private forum, you will see several people trading the same "basic" ideas that are in this thread, but most of them do it with a small twist. That's really the key right there.....make it your own, once you understand the basics.

We all see charts differently, it's up to you to find your way - and then take it from there.

I would say that is most of what the first year of trading is.
  • #10,323
  • Aug 11, 2010 11:33am Aug 11, 2010 11:33am
Quoting Sutts
Thanks for the pointers clockwork. The H4 bar I was referring to did in fact close as a pin (GMT based charts) and an entry on the break of this produced 140 odd pips at one point before it fell back a little. Would this be an acceptable trade based on your method that I can file away as an example or was the execution flawed and perhaps saved by the fed announcement?

Just interested as I can't see a short setup in the same region. It's possible I haven't got to the relevant section in the thread yet though.

Thanks again.
Do me a favor and post the chart.....I will do a comprehensive exam and post about it. (At work using phone for posting at the moment.)
  • #10,324
  • Aug 11, 2010 11:53am Aug 11, 2010 11:53am
Quoting Sutts
Thanks for the help Arfer. I just want to start seeing weekly charts the way you guys do and it worries me that I'm drawing weekly levels that don't seem to be relevant.

I hope by following the setups described here, over time I'll tune in to the proper way of seeing things.

I like your advice regarding home runs. It makes perfect sense to wait for the strongest levels and highest T/F signals before entering. I guess the best levels are the ones with the most weekly fractals clustering around.

I'm currently just looking at very strong fractals...lows...
Fractals are a Bill Williams thing aren't they? To be honest I don't think in that way...

Basically, draw your major s/r lines at large round numbers, zoom in to a shorter time frame and when the price bounces from one of those levels in the direction of the main trend enter in that direction.

I've just seen that Chris has answered you above and you know he can always sum it up best. What I wrote above is basically right but however you interpret the information at the start of the thread you have to put it together into something that works for you.

That's the best thing about this thread, we all trade bounces from s/r but how we actually determine what that means for ourselves and the extra things that we use (like my 3sma typical) is up to us.

If you keep at it you'll find your way sooner or later. Like Jharvey said above, even with a good thread like this, making it work for you is NOT always obviously easy.

Oh, and the levels on the weekly chart that you should be drawing are OBVIOUS and have acted as strong s/r (ie reversed a trend completely) in one direction many times or in BOTH directions (the best way) a couple of times.
Position trader - Anything intraweek is just noise...
  • #10,325
  • Aug 11, 2010 1:09pm Aug 11, 2010 1:09pm
Quoting clockwork71
Ok, I will try not to make this confusing....lol

I don't use fractals. On purpose that is. Of course, but it's very definition, a pinbar is usually a fractal.....

As far as getting the levels correct, just know that they are almost always at a place that ends with "00" or "50". For example, 1.3000 in EUR/USD. 1.2500 was before. Anything else could be a minor area, but your entries should ALWAYS be at major levels.

Minor areas can be used to tuck stops behind, but truthfully, over time - you will find the less trades you take,...

Thanks CW, that's very helpful. I'll start paying more attention to the big rounds. I'm surprised that fractals don't feature in your tool set as they do highlight S/R touches that leave the zone with energy (i.e. not revisiting the area for at least 2 bars (or 3 in my case). Without fractals as a filter there's an awful lot of wick ends to be checked in a 10 year data set. Perhaps your trained eye is picking out the fractals subconciously and ignoring the touches that just result in a quick blip?

I guess the questions I need to answer in order to get this S/R business straight are:

1. If a bar bounces out of a potential S/R area but results in a quick blip (e.g. 1 bar up then falls right back), should I treat this as a touch when determining if the area is a true S/R zone? My thoughts were that the weak bounce means the supply/demand imbalance in the zone is not powerful enough to consider it important. On the other hand, the mere fact that price couldn't get through the zone (however powerful the bounce) might be the most important factor here.

2. Do you always focus on the wick ends or can S/R levels be based on a line drawn through opening/closing prices?

I think I might be looking too closely at the charts. Arfer is stressing that the levels should be OBVIOUS. I've just zoomed out my weekly chart as far as it will go and while I can no longer make out the individual bars, the major swing points really stand out and shout at you. Is this an effective way of finding S/R do you think? It seems it might be, especially if we are rounding up/down to the nearest round number so accuracy isn't key. I also tried the line chart mode which seems to ignore the highs/lows but makes reading the swings quite easy. Is this something that could be used too?


Sorry...so many questions. Thank you so much for your help with this.
  • #10,326
  • Aug 11, 2010 1:17pm Aug 11, 2010 1:17pm
Quoting clockwork71
Do me a favor and post the chart.....I will do a comprehensive exam and post about it. (At work using phone for posting at the moment.)
Thanks CW, that would be great . I posted the charts earlier on but here they are again. The 1.57 level seemed quite "obvious". Price had just shot up through this level without any weekly reaction to it and I was kind of expecting it to pull back for a quick test then carry on upwards. Of course you were right and it's now falling back towards the 1.55 level as you expected.

Wish I knew how you determined the level wasn't worth trading!

Thanks for your valuable help.
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  • #10,327
  • Aug 11, 2010 1:34pm Aug 11, 2010 1:34pm
Quoting Arfer Daily
Fractals are a Bill Williams thing aren't they? To be honest I don't think in that way...

Basically, draw your major s/r lines at large round numbers, zoom in to a shorter time frame and when the price bounces from one of those levels in the direction of the main trend enter in that direction.

I've just seen that Chris has answered you above and you know he can always sum it up best. What I wrote above is basically right but however you interpret the information at the start of the thread you have to put it together into something that works...
Cheers Arfer, good stuff. Not sure where fractals came from but I've always seen them as identifying strong reactions to a price level where the supply/demand imbalance is greatest. Without using fractals I find myself drawing S/R at levels where price touched several times but didn't really go far afterwards. I was thinking this was a bad thing but maybe it isn't after all.

In terms of your advice "Basically, draw your major s/r lines at large round numbers, zoom in to a shorter time frame and when the price bounces from one of those levels in the direction of the main trend enter in that direction." The charts I posted seem to follow those rules. The S/R level I identified was at the 1.57 round number. Price has recently broken upwards past the prior weekly swing high and could be said to be trending upwards fairly strongly. Price then penetrates the 1.57 level with energy and pulls back to form an H4 pin on the level.

I realise you don't rate H4 entry signals but it did represent a shorter T/F bounce off a round number weekly S/R level in the direction of the trend I think.

What I'm getting from your posts is that:

1. I should be only looking at big round number bounces at obvious weekly S/R levels

2. Weekly and daily entry signals are the ideal.


Please correct me if I've misunderstood anything.

Thanks!
  • #10,328
  • Aug 11, 2010 2:19pm Aug 11, 2010 2:19pm
Quoting Sutts
Cheers Arfer, good stuff. Not sure where fractals came from but I've always seen them as identifying strong reactions to a price level where the supply/demand imbalance is greatest. Without using fractals I find myself drawing S/R at levels where price touched several times but didn't really go far afterwards. I was thinking this was a bad thing but maybe it isn't after all.

In terms of your advice "Basically, draw your major s/r lines at large round numbers, zoom in to a shorter time frame and when the price bounces from one of those levels...
I'm afraid you've got it dead right! My own personal interpretation of what I have learned from Chris and this thread is to "trade your own chart", ie develop your own opinion about where a pair is going and don't let anyone else's opinion sway you and the higher the time frame the more reliable the signal.

The above means that you will definitely take a lot less trades but I promise you that in the long run you will make more money.
Position trader - Anything intraweek is just noise...
  • #10,329
  • Aug 11, 2010 2:25pm Aug 11, 2010 2:25pm
The other thing I would say is that if you are following the trend it will make life much MUCH easier! Also, maybe a s/r will hold, the other possibility is that it won't! What I mean is that even if you get a perfect signal at a perfect location, you could still lose! What do you do about that? Use a realistic stop loss (100 - 300 pips depending on the pair and the next s/r level) and just accept that sometimes you are going to lose.

As Chris has always said, the first time you get a 1000 pip+ trade, your trading will change forever.
Position trader - Anything intraweek is just noise...
  • #10,330
  • Aug 11, 2010 3:40pm Aug 11, 2010 3:40pm
It is approaching.
That will be a nice trade if it produces a daily hammer on Friday
  • #10,331
  • Aug 11, 2010 3:43pm Aug 11, 2010 3:43pm
Quoting Sutts
Thanks CW, that would be great . I posted the charts earlier on but here they are again. The 1.57 level seemed quite "obvious". Price had just shot up through this level without any weekly reaction to it and I was kind of expecting it to pull back for a quick test then carry on upwards. Of course you were right and it's now falling back towards the 1.55 level as you expected.

Wish I knew how you determined the level wasn't worth trading!

Thanks for your valuable help.
The 1.57 level to me was minor. I guess the easiest way to explain it is that resistance, (in this case) is always considered still there until you break above the highest point. (If that makes sense.) The highest point to me was the 1.60 area.
  • #10,332
  • Aug 11, 2010 3:47pm Aug 11, 2010 3:47pm
Quoting Sutts
What I'm getting from your posts is that:

1. I should be only looking at big round number bounces at obvious weekly S/R levels

2. Weekly and daily entry signals are the ideal.


Please correct me if I've misunderstood anything.

Thanks!
For what it's worth, this is my take on these statements:

#1 is great, and what I do....

#2 is only somewhat true. A better way to phrase that is that a daily or weekly signal tends to be more reliable....In truth, any bounce at S/R can always be found to have a shorter term trigger somewhere. It's hindsight of course.....but on every major bounce, there is a 15 min or 30 min or 5 min hammer, etc....I don't recommend trading them of course, it's just an observation.
  • #10,333
  • Aug 11, 2010 3:48pm Aug 11, 2010 3:48pm
Quoting Arfer Daily
As Chris has always said, the first time you get a 1000 pip+ trade, your trading will change forever.
Hell, I still remember the first 100 pip trade. A long on EUR/USD. Thought I has whipped the market that day. lol
  • #10,334
  • Aug 11, 2010 4:05pm Aug 11, 2010 4:05pm
Any thoughts or opinions on the power of this bar being beaten down? I would have found that to be quiet powerful, a failed pin I think it was called?

It was about 2-3 pips off from touching 1.60 only to get rejected - I like this pair.
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  • #10,335
  • Aug 11, 2010 4:45pm Aug 11, 2010 4:45pm
CW, Arfer,

Thanks again for the pointers. I'll get there I'm sure.

You made me laugh talking about your first 100 pip / 1000 pip win. I've spent several years getting excited about a 40 pip win. This is quite a change for me as you can imagine.

I have tried to ride longer term moves in the past but it's always come back and got me.
  • #10,336
  • Aug 11, 2010 6:13pm Aug 11, 2010 6:13pm
Quoting VitaminBeer
Any thoughts or opinions on the power of this bar being beaten down? I would have found that to be quiet powerful, a failed pin I think it was called?

It was about 2-3 pips off from touching 1.60 only to get rejected - I like this pair.
A busted pin, failed pin, etc, etc....

Yes, I think this is a short to be honest. I am waiting for a nice entry myself.
  • #10,337
  • Aug 11, 2010 8:13pm Aug 11, 2010 8:13pm
For those of you that trade the FTSE, I have accepted a job writing for a blog that covers it.....

http://www.100ftse.com

Think of it as a "News Portal." I actually have been there for a few weeks, but as a "ghost writer." I think Dave finally thinks I am good enough, or at least will stick around. He posted my name today. lol

http://http://www.100ftse.com/ftse-falls-bank-england-repeats-federal-reserves-concern-1334
  • #10,338
  • Aug 11, 2010 10:25pm Aug 11, 2010 10:25pm
Quoting clockwork71
Hell, I still remember the first 100 pip trade. A long on EUR/USD. Thought I has whipped the market that day. lol
Me too!!! Now I don't see them as often
  • #10,339
  • Aug 11, 2010 11:26pm Aug 11, 2010 11:26pm
Quoting albertsy2
Me too!!! Now I don't see them as often
No worries, with the exception of today, the markets have been pretty back and forth. I think today could have been the beginning of the fall move. Maybe a precursor if you will. It certainly seems that a down move is in the cards, and when volume picks up - we should start trending a little better.
  • #10,340
  • Aug 12, 2010 7:26am Aug 12, 2010 7:26am
Quoting clockwork71
Hell, I still remember the first 100 pip trade. A long on EUR/USD. Thought I has whipped the market that day. lol
I still remember my first big trade. Opened a GBPUSD short on a Monady, and rode it down 330 pips, closing it on Friday. That was an eye opener.
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