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Sonic R. System

  • #23,321
  • Jul 14, 2011 6:58pm Jul 14, 2011 6:58pm
Hello Sonikers,

Here is the EU chart from my broker showing a short sell stop order at 1.4113 based upon a set up I call the Sonic Pyramid. While the dragon is displaying a sideways trend, price is below, thus I look for short entries only. In this case, the ROC has turned down after rising above the zero line - this is my signal to go short on a stop below the day's low.
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  • #23,322
  • Jul 14, 2011 7:44pm Jul 14, 2011 7:44pm
Quoting ddaytrader
Hello Sonikers,

Here is the EU chart from my broker showing a short sell stop order at 1.4113 based upon a set up I call the Sonic Pyramid. While the dragon is displaying a sideways trend, price is below, thus I look for short entries only. In this case, the ROC has turned down after rising above the zero line - this is my signal to go short on a stop below the day's low.
ddaytrader, please help me understand.....

1. ROC shows below zero for first time on the last/current candle on the chart? This is your current signal to act?

2. At what price to act is based on the previous candle, which is the next to last candle on the chart? It has a low of 1.4114x. Is that why you select the 1.4113 price to act on, one pip below the low of the candle that is previous to the ROC signal?

3. What do you mean by going short on "a stop below the day's low"? Are you now waiting for some future daily candle to close below 1.4113? And then in the day following that, you will set up a short entry order at the 1.4113 price?
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  • #23,323
  • Jul 14, 2011 7:47pm Jul 14, 2011 7:47pm
Quoting ddaytrader
Hello Sonikers,

Here is the EU chart from my broker showing a short sell stop order at 1.4113 based upon a set up I call the Sonic Pyramid. While the dragon is displaying a sideways trend, price is below, thus I look for short entries only. In this case, the ROC has turned down after rising above the zero line - this is my signal to go short on a stop below the day's low.
Who's your broker ? Never seen a chart like this, Is this mt4 ?
  • #23,324
  • Edited 8:21pm Jul 14, 2011 8:00pm | Edited 8:21pm
EU:

This last asian session for the week is the first time these traders have to respond to yesterday's four USD high impact releases. Their response so far has been to work the price back up part way, to the upper whole number area, where apparently they sold it off heavily. The price immediately fell one strong bear bar back down. This is a bearish sign.

Price is sandwiched between upper S&R = 1.4170 and the lower half number. S&R = 1.4136 is the next below the half number, and this is where price based Wednesday, before the run to the high on Thursday.

So, I am thinking that for any next short entry, using M15, a close below 1.4136 with whatever next candle moves below that close would be a suitable short entry. The next S&R below is 1.4108. It is interesting that this "entry area" seems to fall right in line with the entry target price of 1.4113 mentioned in the last post by ddaytrader.

A possible PA Wave senario of price breaking down thru the half number area is depicted in the chart. The red vline marks the London open. In actuality, PA may not embark on the next true course until the next USD high impact release later today; the last for the week.
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  • #23,325
  • Jul 14, 2011 8:26pm Jul 14, 2011 8:26pm
Quoting traderathome
ddaytrader, please help me understand...
Sure TAH, anything for you, my friend!

Quoting traderathome
ddaytrader, please help me understand.....

1. ROC shows below zero for first time on the last/current candle on the chart? This is your current signal to act?
Remember that the FX world considers a day 5 PM to 5 PM NY time. While retail FX traders like us often mistake Tokyo or London as the "open," bankers, aka "the BB's," consider it a new day at 5PM EST/EDT. So, the current bar is today's bar, the last daily bar for the week. I would usually wait for this bar to close to call a signal. Usually ...

ROC does not have to go below zero for a short. It merely needs to turn down. I usually require that it does so on the close, but with current volatility, I flex my rules a bit to allow for an intraday entry when it becomes apparent that the indicator will turn down assuming price continues lower. So usually, I'd wait for the current bar, today's bar, to close, and then I'd have my entry order in based on whatever today's low woould be, and that order would be active when the next week opened.

Quoting traderathome
2. At what price to act is based on the previous candle, which is the next to last candle on the chart? It has a low of 1.4114x. Is that why you select the 1.4113 price to act on, one pip below the low of the candle that is previous to the ROC signal?
Yes. I want to open on a stop a pip below that low. It is always based on the low of the day prior to entry. As entry may occur today, I want to enter if we take out yesterday's low. When I get a signal on an inside day, I will usually wait and enter on a break of the outside day,not the inside day. If that is confusing, it will be clear once we get a real world, real time example.

Quoting traderathome
3. What do you mean by going short on "a stop below the day's low"? Are you now waiting for some future daily candle to close below 1.4113? And then in the day following that, you will set up a short entry order at the 1.4113 price?
I should have written, "a stop below the prior day's low." Sorry for the confusion.

I have had a long and exhausting day, so I hope my explanation here is correct. I think it is. I will be sure to re-read it in the morning and correct any mistakes.

The big take away here is this: While the DTF (daily time frame) dragon is showing a trading range, price itself is currently below the dragon. his gives me a bias to the short side, which would instantly cange on a close above the dragon. Since price is below, I take only short signals from the ROC. A signal occurs, in this case, when a rising ROC turns back down in the direction ofthe current bias.
  • #23,326
  • Edited 9:04pm Jul 14, 2011 8:58pm | Edited 9:04pm
Here is my brokers chart of the GBP.CHF - I have been continuously short this pair since April. I had a couple small wipeouts (whipsaws, losses) before I caught the south-going wave.

I have gotten a couple of PM's about my chart. No, this is not MT4 - my broker is www.interactivebrokers.com - when you are ready to leave the stop-hunting, spread-jacking, re-quoting bucket shops, that is where you will go.

By the way, I know that Sonic named the SonicR because the "R" stood for Raghee Horner, from whom he discovered the Sonic Dragon. Well, I discovered the 2 period ROC from Linda Bradford Raaschke form her book Street Smart Trading, in a chapter that she calls "Momentum Pinball." So perhaps Sonic Pyramid could also be known as SonicLBR.
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  • #23,327
  • Jul 14, 2011 11:17pm Jul 14, 2011 11:17pm
Quoting ddaytrader
Here is my brokers chart of the GBP.CHF - I have been continuously short this pair since April. I had a couple small wipeouts (whipsaws, losses) before I caught the south-going wave.

I have gotten a couple of PM's about my chart. No, this is not MT4 - my broker is www.interactivebrokers.com - when you are ready to leave the stop-hunting, spread-jacking, re-quoting bucket shops, that is where you will go.

By the way, I know that Sonic named the SonicR because the "R" stood for Raghee Horner,...
ddaytrader,

1. Aside from that broker being highly recommended by you for live trading, for teaching and showing examples of your method you might consider using some demo account MT4. This should make it easier on you to draw on the chart, and should result in faster comprehension by Sonikers. The only problem is that I don't find "ROC" on MT4. We'd have to find the indicator elsewhere and add it to MT4.

2. As far as a name for the method, Raghee ......., or ....... Raaschke, both "R's", so? Hey, maybe......Sonic D, for ddaytrader (see pic)!

3. Ok, now I'm jealous. I don't have MY own method. Management says "Pump & Dump", or PD, is two letters and so it won't be allowed!
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  • #23,328
  • Jul 14, 2011 11:33pm Jul 14, 2011 11:33pm
shorted EU with early entry tight stop, will see
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seeing through
  • #23,329
  • Jul 14, 2011 11:40pm Jul 14, 2011 11:40pm
Quoting pipphunter
shorted EU with early entry tight stop, will see
Morning all
Looks to me
good entry and good 3 line target
depends on what u drew that 3 line as target ? Sonic system?
if so can u post tpl
But Trade safe because news today
Bank Stress Test Results
  • #23,330
  • Edited Jul 15, 2011 12:18am Jul 14, 2011 11:51pm | Edited Jul 15, 2011 12:18am
Quoting pipphunter
shorted EU with early entry tight stop, will see
Hi piphunter.

You are doing what I got into the habit of doing, namely entering when I thought the setup looked good, and without waiting for the London open to get underway for a while to see if there might be a pop, or a move in the opposite direction.

For obvious reasons, I am trying to not do that anymore. When the London open comes, and the umpire shouts, "Play ball!", the BBs may headfake up for better positioning for a move down. If they do so, then when the down move comes, you may find a higher short entry setup then, and.........wish you had waited.

There are very good reasons that Sonic says wait for the London session to trade, and I have experienced them all the hard way.
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  • #23,331
  • Jul 15, 2011 12:15am Jul 15, 2011 12:15am
Quoting traderathome
Hi piphunter.

You are doing what I got into the habit of doing, namely entering when I thought the setup looked good, and without waiting for the London open to get underway for a while to see if there might be a pop, or a move in the opposite direction.

For obvious reasons, I am trying to not do that anymore. When the London open comes, and the umpire shouts, "Play ball!", the BBs may headfake up for better positioning for a move down. If they do so, then when the down move comes, you may find a higher short entry setup then, and.........wish...
Yeah..TAH...the disadvantage of early entry as you said and agreed. the advantage is you can get the tight stop and better reward/risk.

the major reason to support my enty is, it's protect by good resisitant level (the yellow line in H1 chart). wheather it's london time is not so imporatant to me. very minor consideration of the possible BB action.

overall consideration: the entry with good S/R level protection and tight stop, the chance of winning lower than the classic sonic R setup.. it's counter balance by lower risk money....

just my 2 cent.
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seeing through
  • #23,332
  • Jul 15, 2011 12:25am Jul 15, 2011 12:25am
Quoting pipphunter
Yeah..TAH...the disadvantage of early entry as you said and agreed. the advantage is you can get the tight stop and better reward/risk.

the major reason to support my enty is, it's protect by good resisitant level (the yellow line in H1 chart). wheather it's london time is not so imporatant to me. very minor consideration of the possible BB action.

overall consideration: the entry with good S/R level protection and tight stop, the chance of winning lower than the classic sonic R setup.. it's counter balance by lower risk money....

just my...
What I am saying is that your tight stop might be blown out by a pop up, as London session BBs go to work hiking prices to get better positioned for a later move down. The "S/R level protection" will become like a bad insurance policy that ends up not covering you.
  • #23,333
  • Jul 15, 2011 12:45am Jul 15, 2011 12:45am
Pacific time is what my time zone is so when London opens it is midnight here. Too bad I can not test this great system during those hours..Is anyone trading it with the 1 hour charts?
  • #23,334
  • Jul 15, 2011 12:48am Jul 15, 2011 12:48am
Quoting traderathome
What I am saying is that your tight stop might be blown out by a pop up, as London session BBs go to work hiking prices to get better positioned for a later move down. The "S/R level protection" will become like a bad insurance policy that ends up not covering you.
yes, there's possibility that the price pop up break the S/R level, that's why the stop in place. if that happen, it's part of the systemic lost, I will take it as expected and move on to next set up.

BTW "BB action" is not helping in trading as far as i can see. as least, it's not helpful at all IMHO...
seeing through
  • #23,335
  • Edited 1:12am Jul 15, 2011 12:58am | Edited 1:12am
Quoting pipphunter
yes, there's possibility that the price pop up break the S/R level, that's why the stop in place. if that happen, it's part of the systemic lost, I will take it as expected and move on to next set up.

BTW "BB action" is not helping in trading as far as i can see. as least, it's not helpful at all IMHO...
There are a lot of words to type to explain that professional traders might "buy" up the levels/depths until they get the price up where they have already placed sizeable sell orders, getting them executed; that they might do so also to run stops to increase market liquidity, and that they might do so also to trigger other orders to get executed which will soon get stopped out, increasing market liquidity.

All this is designed to assure, for a run up, their sizeable sell orders (close longs and/or open shorts) get filled, and for a run down, their sizeabe buy orders (close shorts and/or open longs) get filled.

There, now.......do you really expect me to write all that each time I need to refer to the real possibility that "BBs" might work the price up/down?
  • #23,336
  • Jul 15, 2011 1:13am Jul 15, 2011 1:13am
Quoting traderathome
There are a lot of words to type to explain that professional traders might "buy" up the levels/depths until they get the price up where they have already placed a sizeable sell order, getting it executed, or that they might do so also to run stops to increase market liquidity, or that they might do so to trigger other orders to get executed which will soon get stopped out...also increasing market liquidity. All designed to assure their sizeable sell order gets filled.

There, now.......do you really expect me to write all that each time I need...
I agreed that those price manipulation happens all the time, especially in stock market. it alll bring to the point that how the analysis of "BB actions" can help me to make better trading decesions? I cannot see how, and i don't think i am capable to do so...therefore at this point I don;t consider the BB action as all. I take the shot at the best of my trading ability, if it pay off then it's great. it "they" got me, then I will try another time.

I see the forex market like big African jungle (or eco system), there's lions and tigers (BBs), but every creatures surrive in there own ways,and make good life out of it.
seeing through
  • #23,337
  • Jul 15, 2011 1:19am Jul 15, 2011 1:19am
Quoting pipphunter
I agreed that those price manipulation happens all the time, especially in stock market. it alll bring to the point that how the analysis of "BB actions" can help me to make better trading decesions? I cannot see how, and i don't think i am capable to do so...therefore at this point I don;t consider the BB action as all. I take the shot at the best of my trading ability, if it pay off then it's great. it "they" got me, then I will try another time.

I see the forex market like big African jungle (or eco system), there's lions and tigers (BBs),...
"it alll bring to the point that how the analysis of "BB actions" can help me to make better trading decesions? I cannot see how,...." -

It comes down to this. At any time the price can suddenly start to move in the opposite direction. And this has a high frequency of happening around the Frankfurt/London open times. So, until the London open has been underway for a bit of time, there is no telling if this sort of thing is going to happen. By waiting a bit after the London open to enter a trade, the chance of avoiding such is improved.
  • #23,338
  • Jul 15, 2011 1:39am Jul 15, 2011 1:39am
Quoting traderathome
"it alll bring to the point that how the analysis of "BB actions" can help me to make better trading decesions? I cannot see how,...." -

It comes down to this. At any time the price can suddenly start to move in the opposite direction. And this has a high frequency of happening around the Frankfurt/London open times. So, until the London open has been underway for a bit of time, there is no telling if this sort of thing is going to happen. By waiting a bit after the London open to enter a trade, the chance of avoiding such is improved.
thanks for your advice.
1. how frequenctly this BB action happen and fake break strong S/R level (H1 &H4 levels) per london section? not that many as I can remembem.

2. back to the basic, I would not take the trade if there is no strong S/R level protecting the trade. especially in the thin market, which include per london section.

so,, BBs is things to avoid, but the S/R is the key to me..
seeing through
  • #23,339
  • Jul 15, 2011 1:41am Jul 15, 2011 1:41am
Quoting zz_zhang
spotted A/u with a nice inverted H&S with the last S forming up nicely, i have miss the entry 1.0775, will wait and enter at rectrace around 1.0760. IMO

trade ended after shifting SL to 1.0790

last shoulder touched. @ 1.0675
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trade safe
  • #23,340
  • Jul 15, 2011 2:18am Jul 15, 2011 2:18am
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Thats my point of view

Good Luck
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