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  • #1
  • First Post: Edited 6:01pm Sep 18, 2010 9:16am | Edited 6:01pm
My purpose here is to work on various price action techniques: price patterns, candlesticks, S/R; and also, fibs and RN in evolving solid approaches to trading forex. Throw in fundamental analysis into the mix too. There will be all sorts of ideas generated and discarded. Essentially, it can be broken down into three parts (1)entry (2)pyramiding (3)exit. The goal is to perfect various techniques for these three points.

MY interest is not to come up with a new indicator or some fantastic new method. I am a strong believer in the simpler the better when it comes to trading. My interest and my core belief is to find new and clever ways of combining simple techniques to squeeze and squeeze hard as many pips(increase R/R) from the market as much as possible.

Finding a solid trend on higher time frames: daily, weekly, monthly. Then, mastering the art of precision entry on lower, lower time frame and navigating against noise. While riding that daily/weekly/monthly trend all the way...for weeks and months, if necessary, years. This is what it is all about.
  • #2
  • Edited Sep 19, 2010 2:44am Sep 18, 2010 10:08am | Edited Sep 19, 2010 2:44am
METHOD #1

BOUNCE TRADES off daily highs and lows: picking tops and bottoms.

Trading bounces off confluence of S/R, rn, fibs, trendlines are great for trend continuation trades....but here i am interested in picking tops and bottoms of daily charts. First idea i want to start working on: is the use of three valleys or three peaks, neatly stacked on top of each other, with a nice momentum ratio, and solid FIB swings that hardly breached the 61%. The concept is to then use the beginning of the three valleys or peaks as BOUNCE point.

Currently, i am comfortable with the D1 as the setup chart and H1 as trigger chart.

CHART EXAMPLE:

H1 trigger chart
http://www.forexfactory.com/attachme...1&d=1284703083

the DAILY chart:
http://www.forexfactory.com/attachme...1&d=1284703083


So far, i have noticed that price barely breach those points by more than -10pips before reversing and giving at least, +20pips. Factoring spread, this should give enough room for a 1:1 BE. Of course, the ultimate goal is to catch one of those 1 in 10 trades that goes boom to +500 or +1000 pips on the daily chart, all the while, only risking -10 or -20 pips.
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  • #3
  • Sep 18, 2010 10:29am Sep 18, 2010 10:29am
The point of this technique is to trade DAILY tops and daily bottoms without waiting for PA confirmation. Higher risk.


Quoting .Entropy
First idea i want to start working on: is the use of three valleys or three peaks, neatly stacked on top of each other, with a nice momentum ratio, and solid FIB swings that hardly breached the 61%. The concept is to then use the beginning of the three valleys or peaks as BOUNCE point.

Currently, i am comfortable with the D1 as the setup chart and H1 as trigger chart.

CHART EXAMPLE:

H1 trigger chart
http://www.forexfactory.com/attachme...1&d=1284703083

the DAILY chart:
http://www.forexfactory.com/attachme...1&d=1284703083


So...
The point of this technique is to trade DAILY tops and daily bottoms without waiting for PA confirmation. Higher risk.
  • #4
  • Edited Sep 19, 2010 2:44am Sep 18, 2010 10:39am | Edited Sep 19, 2010 2:44am
METHOD #2

TREND/trend change: higher highs/lows or lower lows/highs on the daily/weekly/monthly. trendline. S/R zones.Take note of trendline gradient.

example of changes in trendline gradient:
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  • #5
  • Edited Sep 19, 2010 2:45am Sep 18, 2010 11:34am | Edited Sep 19, 2010 2:45am
METHOD #3

Generally, you enter a standard BPC trade after the completion of the bpc. I am interested in using the P of the bpc, zooming into lower timeframe, using hector techniques of 1, 2,3 formation to considerably tighten the risk size of the trade. In such a situation, the first exit point wont be the completion of the retracement, it will be projected MM of the BPC itself.

the chart examples are: daily(setup) and h1(trigger).

On the daily chart you can see the BPC breakout highlighted in blue. Generally, you enter at the completion of the BPC(the red line). that is how it is done.
http://www.forexfactory.com/attachme...1&d=1284708699

BELOW you can see the H1 chart. The P(pullback) of the BPC highlighted in blue. You can see it evolve into a 1,2,3, trendline breakout of YAGUEX/HECTOR approach. The plan then is to see how viable it is, given the risk(which i address below) to enter and take that 1,2,3/breakout signal. Essentially, to treat a daily or weekly or H4 breakout trade like a standard hector swing trade through zooming to a much lower time frame, and treat that BPC trade like a standard hector swing trade(naturally, the fibs will be drawn, the rn will be watched out for, etcetera).
http://www.forexfactory.com/attachme...1&d=1284708699


QUESTIONS TO BE ADDRESSED:

- Should one follow the 1/4th, 1/8th time frame rule as applied to all other yaguex trades? That is, if you see the BPC on h4, you go to h1 or 15mins for entry. Or, should 1/16th time frame be used too?

- Should one BE this the moment the trade gets to 1:1? Either by selling 1/2 or moving SL to BE? or dont move to BE until retracement low/high has been reached?

- How does one deal with/screen out BPC that wont complete itself? Because this technique is based on the assumption that the BPC you are trying to trade will complete itself; or barring that, it will at least give you a 1:1 that will get you out clean. Which goes to my fourth point: 1:1 r/r should be significantly lesser than the peak high/low of the *B*. The more considerably lesser, the better.

Essentially, this is treating a BPC like a standard hector swing trade.
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  • #6
  • Sep 18, 2010 12:09pm Sep 18, 2010 12:09pm
Quoting .Entropy
Generally, you enter a standard BPC trade after the completion of the bpc. I am interested in using the P of the bpc, zooming into lower timeframe, using hector techniques of 1, 2,3 formation to considerably tighten the risk size of the trade. In such a situation, the first exit point wont be the completion of the retracement, it will be projected MM of the BPC itself.
.........
Here is another example of what i mean:

DAILY CHART is the setup chart, H1 is the trigger chart.

you can see the BPC on the daily chart(the yellow box), then, zoom into the H1 as trigger chart to see, descending all the way down, the P of the BPC. At the bottom of the P descent you can see the S/R level, you can see the 1,2,3 formation, the break of the inner trendline, the 50% fib, the RN( of 0.9250). That is a standard hector swing trade entry. Which means, our SL gets tighten further, while using the conditions of a standard daily BPC as our exit.

I NEED TO ADD: These are best when used with a minimum of three touch trendline break or a two touch ascending/descending triangle break.
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  • #7
  • Edited 6:44pm Sep 18, 2010 12:22pm | Edited 6:44pm
Quoting .Entropy
Here is another example of what i mean:

DAILY CHART is the setup chart, H1 is the trigger chart.

you can see the BPC on the daily chart(the yellow box), then, zoom into the H1 as trigger chart to see, descending all the way down, the P of the BPC. At the bottom of the P descent you can see the S/R level, you can see the 1,2,3 formation, the break of the inner trendline, the 50% fib, the RN( of 0.9250). That is a standard hector swing trade entry. Which means, our SL gets tighten further, while using the conditions of a standard daily BPC...
On last example: GPP/CAD.

SETUP was daily, BPC was on the h1, entry was on M5.

ADDENDUM: This approach, if properly mastered and judiciously applied will result in increase R/R. And in the case where a daily or weekly BPC leads to a run-away trade, the R/R will be obscenely profitable.
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  • #8
  • Edited Sep 19, 2010 2:45am Sep 18, 2010 12:44pm | Edited Sep 19, 2010 2:45am
Method #4

B-P-C rules of engagement.

- If the P and C of a BPC is taking forever, or developing into too many candles, switch to X4 time frame. if that new level is also developing into too many candles, once again, switch to X4.

- Your breakout candle or candles must never be more than two before a pullback happens.

- Your pullback candle or candles must not have a lot of closed bodies behind your s/r line or trendline. Preferably -- none; at most -- two.

- Beware of touch #3 and touch #2. And of course, the 50% fib level.

- Three touches is necessary for your trendline break trades. Two touches for an ascending/descending triangle. This is the higher probability trade.

- Most BPC will only give you an r/r of 1:1 unless it is a TRENDLINE collapse move or a bpc off a weekly high or low. These are my observations. These are the breaks that generally yield the largest moves. Especially, if those moves are fundamentally backed. Coupling a tight SL with a large move like that is what trading is about, and of course, pyramiding and riding it trend to the very end.

- At this point in my trading, i am only comfortable with weekly, monthly, daily breaks. On rare occasions, i do H4 breaks.
  • #9
  • Edited Sep 19, 2010 2:45am Sep 18, 2010 1:39pm | Edited Sep 19, 2010 2:45am
Method #5

SWING TRADES: Rules of engagement.

Hector's approach. H4/h1/15mins. D1/h4/h1/15mins. W1/d1/h4. M1/w1/d1. AT confluence(fib, rn, s/r, outer trendline)

Enter at BPC after inner trendline break(3 touches minimum); OR, 1,2,3 completion without bpc or trendline break; OR, bpc on 1,2,3 without trendline break.

BE the trade after 1:1 or at retracement high/low.

Beware of the 50% retracement level.
  • #10
  • Edited Sep 19, 2010 2:46am Sep 18, 2010 1:42pm | Edited Sep 19, 2010 2:46am
Method #6

I recently came across a technique of combining a modified standard LOB(using 4HR consolidation) with a 1minute candle breakout + 10pips SL/BE parameter + ADR as PT.

RISK/REWARD = 1:10.

Totally love it.

The only thing is that, the technique seems limited to EUR/USD, i will attempt to develop it for other pairs as well. Afterall, this is the Fx Dev Group, we develop robust forex techniques.
  • #11
  • Sep 18, 2010 6:00pm Sep 18, 2010 6:00pm
Where i get my fundamental info:

http://www.actionforex.com/analysis/...-fundamentals/

http://www.tradingeconomics.com/

http://www.fx360.com/commentary/Index.aspx (sieve that for only boris and kathy)
  • #12
  • Edited 2:46am Sep 19, 2010 1:15am | Edited 2:46am
Method #7

Draw a fib from 5 to 4. use the 38 to 61% area confluence with RN and s/r.

Entry should be based on 1,2,3 or inner trendline bpc(3 touches) or 1,2,3 + bpc.

Of course, when price breaks out and form a bpc on the 3 touched trendline, that is another trade itself.
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  • #13
  • Edited 1:51am Sep 19, 2010 1:20am | Edited 1:51am
Quoting .Entropy
Draw a fib from 5 to 4. use the 38 to 61% area confluence with RN and s/r.

Entry should be based on 1,2,3 or inner trendline bpc(3 touches) or 1,2,3 + bpc.

Of course, when price breaks out and form a bpc on the 3 touched trendline, that is another trade itself.

I wonder if the strength of the breakout from 7 is stronger and greater when 6 is less than 38 or 23% fib levels of 5 to 4......
  • #14
  • Edited 10:48am Sep 20, 2010 10:36am | Edited 10:48am
SWINGS + CANDLESTICK patterns

Method # 8
(taken from danuk thread: http://www.forexfactory.com/showthre...255112&page=14 )

First, find trends on daily/weekly/monthly.
Then, at area of confluence of S/R, RN, FIBS(38,50,61) look for harami or engulfing bar or hammmer/gravestone/shooting star.
Enter at +10 pips below formation. SL at -10 pips above pattern formation.
Condition: Move SL to BE at retracement low/high close. NOT THE retracement high/low.
Condition II: RISK and retracement low/high must be at least 1:1 before considering for trade.
Condition III: After two back to back failed entry on the same valid setup, switch to higher time frame, and enter there. If there is another failure after that, then, ignore that setup. Three strikes you are out. Let me expand on that: If risk vs retracement high/low = 1:1, then only one attempt at entry permitted; If risk vs retracement high/low = 1:2, then only two attempt at entries permitted; if it is 1:3 or higher, then only 3 attempt permitted. 3 is the cap.

CHART EXAMPLE ATTACHED:
http://cdn.forexfactory.com/attachme...6&d=1284988028
  • #15
  • Edited 2:52am Sep 21, 2010 2:34am | Edited 2:52am
Quoting .Entropy
METHOD #2

TREND/trend change: higher highs/lows or lower lows/highs on the daily/weekly/monthly. trendline. S/R zones.Take note of trendline gradient.

example of changes in trendline gradient:
Hmmm...reading through hector/yaguex/wtb posts i just re-learn something i have forgotten a long time ago...the use of price channels to predict price targets:

http://www.forexfactory.com/showpost...40&postcount=1

This is an important trend/trend change tool. Even though it still have the same skeletal structure of 3 touches trendline principles, in this case, one is not using it to enter trade, but as price targets.
  • #16
  • Edited 10:00am Sep 24, 2010 9:43am | Edited 10:00am
Quoting .Entropy
Method #5

SWING TRADES: Rules of engagement.

Hector's approach. H4/h1/15mins. D1/h4/h1/15mins. W1/d1/h4. M1/w1/d1. AT confluence(fib, rn, s/r, outer trendline)

Enter at BPC after inner trendline break(3 touches minimum); OR, 1,2,3 completion without bpc or trendline break; OR, bpc on 1,2,3 without trendline break.

BE the trade after 1:1 or at retracement high/low.

Beware of the 50% retracement level.
Provisionally, SL shouldnt be less than -20pips, for now, anyways. And the three strikes rule applies to 1,2,3 entries that fails one after the other. Of course, this re-entry after failure is contigent on the next formation being lower/higher than the previous one. all within the 38/61 fib band, of course.

This also applies here: http://www.forexfactory.com/showpost...41&postcount=5

And to address the question of entry in yaguex + bpc. I will say this: if you see the P on bpc on h1, go to 15mins(1/4th) to draw your lines, then, look for a bpc on 15mins or 5mins to take your trade while not tightening the SL below -20pips. SAME HERE: If the P is on H4, draw lines at H1, prepare for entry on h1 or 15mins. IF P is daily, draw lines on h4, prepare for entry on h4 or h1. I have been talking about 3 points touches application here...a striaght up, 1, 2,3 may also apply....

Of course, i will refine this further as time passes......
  • #17
  • Sep 24, 2010 10:04am Sep 24, 2010 10:04am
my head hurts
Time hides Nothing
  • #18
  • Sep 24, 2010 10:40am Sep 24, 2010 10:40am
Quoting .Entropy
Where i get my fundamental info:

http://www.actionforex.com/analysis/...-fundamentals/

http://www.tradingeconomics.com/

http://www.fx360.com/commentary/Index.aspx (sieve that for only boris and kathy)
Question: At what time frame should one ignore lesser fundamental news release during entry?

H4 and above? Hmmm....
  • #19
  • Sep 24, 2010 10:44am Sep 24, 2010 10:44am
Quoting CindyXXXX
All I plan to contribute

Quoting CindyXXXX
my head hurts

I see your point from the chart you posted. thanks. I dont disagree, but i will include other parameters at entry point. such as confluence(rn, fib level, etc.)

Yes, what i am writing here is more for myself than others, that is why my posts are jargonized and somehow cryptic. if i know a means of making this completely private, that only I can read it, then, i would.

Thanks for your input.
  • #20
  • Sep 24, 2010 10:46am Sep 24, 2010 10:46am
Quoting .Entropy
I see your point from the chart you posted. thanks. I dont disagree, but i will include other parameters at entry point. such as confluence(rn, fib level, etc.)

Yes, what i am writing here is more for myself than others, that is why my posts are jargonized and somehow cryptic. if i know a means of making this completely private, that only I can read it, then, i would.

Thanks for your input.
trading journal section might be a better way to go less people will be interested if thats what you're after
Time hides Nothing
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