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5Min Intraday System

  • #7,361
  • Edited 6:00am Jan 6, 2011 5:46am | Edited 6:00am
My first trade for 2011. Let us look at the analysis of the chart first - the signals/positive aspects.

This is where I like to see the 3 little sisters - the second and the third sister just below the 50MA or within the war zone. Great example of the 3 little sisters that are formed in line with Phillip's rules for his system. Just too bad the price went through the war zone and broke the 21MA.

See the comments on the chart
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,362
  • Edited 5:57am Jan 6, 2011 5:47am | Edited 5:57am
Now for the warning signs - just to show what I am looking for on a chart

I didn't even mention the big round number (BRN) of 1.3000 between my entry and my planned TP

Also I hope you can see the bigger triangle being formed.
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,363
  • Edited 6:03am Jan 6, 2011 5:51am | Edited 6:03am
The end result (+21pips) - you can see where I put my SL (20pips away and just above 2nd sister and the 50MA. I traded the bounce off the 50SMA - therefor I had to put my SL above the 50MA. You need to put SL where you don't expect the price will go. I expected the price not to go above the 2nd sister/50MA.

Should have entered after the third sister was formed - better entry??? Always easy to make a comment like that afterwards/hind sight
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,364
  • Jan 6, 2011 5:55am Jan 6, 2011 5:55am
Initially I was using a 15min system to trade this breakout and pullback. But I also turned to my 5min chart and saw the signals as indicated on the first chart.

Like I mentioned in a earlier post (my answer in a pm) - one needs to have a few systems/strategies for different market conditions.

For those trying their hands on a 15min chart using this system:
Attached Image (click to enlarge)
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,365
  • Jan 6, 2011 6:11am Jan 6, 2011 6:11am
Quoting Golfer
Now for the warning signs - just to show what I am looking for on a chart

I didn't even mention the big round number (BRN) of 1.3000 between my entry and my planned TP

Also I hope you can see the bigger triangle being formed.
http://cdn.forexfactory.com/attachme...1&d=1294314495
Hi Golfer, could you expand a little on your thoughts of that higher low, your comment "tails formed and the that higher low", was this not offputting when trying to spot that the trend was going to continue downwards?
Or was this the price action you were looking for to see a triangle?
  • #7,366
  • Jan 6, 2011 6:36am Jan 6, 2011 6:36am
Great posts and analysis, Golfer. I missed EU trade because I just got off of a trade GY before this happened. I was watching how it would go though.

I usually do not take a trade if a pullback is that strong like it was in EU earlier today. It's just my observation but it seems that the pattern is not that stable after PA goes beyond 21EMA, close to 50SMA. But in this case, it created the pattern you mentioned.

I would probably trade with a trend line in a higher TF setting, but I am not so comfortable with the PA on 5M. Just like the image on 15M, the PA is not so smooth, IMO. I just don't like too many pin bars
A successful trading depends on knowing what to analyze.
  • #7,367
  • Edited 7:26am Jan 6, 2011 7:03am | Edited 7:26am
Quoting adecleir
Hi Golfer, could you expand a little on your thoughts of that higher low, your comment "tails formed and the that higher low", was this not offputting when trying to spot that the trend was going to continue downwards?
Or was this the price action you were looking for to see a triangle?
Hi Ad

Your question "was this not offputting when trying to spot that the trend was going to continue downwards?":

My answer - defnitely yes. Especially so close to a multi-day low testing the low of Des 29, 2010 (always turn to a longer time frame chart (1h or 4h chart for example) and look to the left of your chart).

I do like to look at the 15min, 1h and 4h (especially Phillip's 4h MACD system - great to determine market rhythm) to give me an indication of a longer time frame market rhythm.

See my comments on the chart.

I hope it helps
Attached Image (click to enlarge)
Click to Enlarge Name: 20110106 1.3.PNG Size: 66 KB
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,368
  • Jan 6, 2011 8:21am Jan 6, 2011 8:21am
Cheers Golfer, I see what you mean in the newer graph, but I have to ask , howcome you decided to take the trade given the combination of the higher low and the fact that it was nearly testing a multiday low?
Is the three little sisters a 'must' in your setup for this system? They seem quite powerful.
From reading your older posts it seems to be a combination of three little sisters and significant level that you look at most.
Cheers for taking time to share all this with us!
Adrian
  • #7,369
  • Jan 6, 2011 8:56am Jan 6, 2011 8:56am
Hey Golfer, I think you meant to say "Pennant", not triangle?
Attached Image
A successful trading depends on knowing what to analyze.
  • #7,370
  • Jan 6, 2011 9:00am Jan 6, 2011 9:00am
Quoting adecleir
Cheers Golfer, I see what you mean in the newer graph, but I have to ask , howcome you decided to take the trade given the combination of the higher low and the fact that it was nearly testing a multiday low?
Is the three little sisters a 'must' in your setup for this system? They seem quite powerful.
From reading your older posts it seems to be a combination of three little sisters and significant level that you look at most.
Cheers for taking time to share all this with us!
Adrian
Hi Adrian

Yes, it was the bounce off the significant level and 50MA and signals on the 15min system I am using meaning there was a confluence of factors. If you do get a confluence of factors - it makes the probability so much higher.

When I started trading this system, I was just looking for the pullback into the war zone and I pull the trigger. Nowadays I am looking for conformation in the form of confluence of signals.

Just remember - don't overanalise, otherwise you won't any trade because there will always by warning signs. Just take the decision and manage the trade afterwards.

I hope it helps
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,371
  • Jan 6, 2011 9:02am Jan 6, 2011 9:02am
Quoting Pipdealer
Great posts and analysis, Golfer. I missed EU trade because I just got off of a trade GY before this happened. I was watching how it would go though.

I usually do not take a trade if a pullback is that strong like it was in EU earlier today. It's just my observation but it seems that the pattern is not that stable after PA goes beyond 21EMA, close to 50SMA. But in this case, it created the pattern you mentioned.

I would probably trade with a trend line in a higher TF setting, but I am not so comfortable with the PA on 5M. Just like the image...

Now that is what I call individual style of trading - thanks for the comment.

Other members - please take note of Pipdealer's comments.
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,372
  • Jan 6, 2011 9:20am Jan 6, 2011 9:20am
Quoting Pipdealer
Hey Golfer, I think you meant to say "Pennant", not triangle?
Hi P

Comment - is it triangle or a pennant? For clarification:

Triangles are formed by two converging tendlines, each connecting a minimum of two price points. There are three major types of triangles, differentiated by the slope of their trendlines: the symmetrical, the ascending, and the descending triangles.

Flags and pennants are some of the most common and reliable continuation patterns. These formations occur after sharp price moves, usually in the middle of steep price trends. The flag resembles a small rectangle sloping against the dominant trend. The pennant looks very much like a small symmetrical triangle. Both of the patterns are completed when the prices break through one of their trendlines

I hope it helps
Attached Images
Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,373
  • Jan 6, 2011 1:05pm Jan 6, 2011 1:05pm
Here is the same EU a couple of hours ago. Even though it was a little after the long down candle, I thought there was much room for more. Not a big trade though.

I entered after the cross, reversal candle pattern, in the war zone. R is a resistance line (blue). I interpreted that the cross was made because of the previous swing high. SL (orange line) was set around there because of many candles that have low wicks.
Attached Image
A successful trading depends on knowing what to analyze.
  • #7,374
  • Jan 6, 2011 8:25pm Jan 6, 2011 8:25pm
orange line should be tp i think instead of sl
of course it is late and i may be wrong
  • #7,375
  • Jan 6, 2011 8:48pm Jan 6, 2011 8:48pm
my bad, R is the SL line, I meant to put as TP line
A successful trading depends on knowing what to analyze.
  • #7,376
  • Jan 7, 2011 1:18pm Jan 7, 2011 1:18pm
Here is my second trade of the year after the release of thr NFP - very,very risky. That is why I decided to risk only 15pips. The two pinbars (tails/wicks to the downside was my main trigger.
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,377
  • Jan 7, 2011 1:19pm Jan 7, 2011 1:19pm
The outcome of the trade
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,378
  • Jan 7, 2011 1:22pm Jan 7, 2011 1:22pm
The hind sight chart and another live setup which I ignore for reasons mentioned on the chart. See how I don't trade each and every pullback into the war zone - it just doesn't work. One needs to chose very carefully.
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Willem Forex recipe for success = Patience, discipline & hard work.
  • #7,379
  • Jan 7, 2011 4:43pm Jan 7, 2011 4:43pm
Yea. That is why I do not like to trade when PA does not bounce before reaching 21EMA. Sometimes there will be no retracement when it does that.

The 1st and 2nd retracements are more reliable as well. If I miss the 2nd one, I will be more careful especially if it is an uptrend.

War zone is between 10 and 21 EMA, right? Instead of the middle point of the war zone, I feel more safe if PA bounces back in the war zone closer to 10EMA side. What do you think?
A successful trading depends on knowing what to analyze.
  • #7,380
  • Jan 8, 2011 12:22am Jan 8, 2011 12:22am
Quoting Pipdealer
Yea. That is why I do not like to trade when PA does not bounce before reaching 21EMA. Sometimes there will be no retracement when it does that.

The 1st and 2nd retracements are more reliable as well. If I miss the 2nd one, I will be more careful especially if it is an uptrend.

War zone is between 10 and 21 EMA, right? Instead of the middle point of the war zone, I feel more safe if PA bounces back in the war zone closer to 10EMA side. What do you think?
Hi P

Yes, the war zone is the area between the 10 and 21MA. Here are two examples.
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Willem Forex recipe for success = Patience, discipline & hard work.
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