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Trading Using Control Bars

  • #121
  • Jul 29, 2011 11:48am Jul 29, 2011 11:48am
  •  Cosi
  • | Joined Jun 2011 | Status: Little girl on the way! Due April!! | 36 Posts
Hello everyone. I’m new to this forum & stumbled on to this post. I tried trading HLC Bars last night and looking for input on whether I got lucky or this is correct use of HLC Bar… I have HLC set for rising green and falling red, noticed that I would see a blue bar come up now and then. On Aud/Usd I entered a short at 1.1000 when blue bar came up on 5m chart, combined with slow stoch confirmation (on multiple time frames) I rode it down to just past next blue bar at 1.0939, up 70 pips. I reversed position at 1.0940 as per blue bar and slow stoch oversold confirmation and even though it still went down to around 1.0910/15 range I got another 60 pips out of trade. Spent all night up trying this out and would like input. Did I get lucky or is this a proper use of HLC combined with slow stoch?...I’m trying to figure out how to save chart image to show. Any input is appreciated.
Thank you:
  • #122
  • Jul 29, 2011 12:25pm Jul 29, 2011 12:25pm
Full disclosure: I did not take this trade as I was not at my computer this morning .

I don't want to overtake this thread, but there was something I did want to point out.

The direction of the Control Bar does not necessarily dictate the direction you should be looking to trade. This is in contrast to some other types of "supply or demand zones" you might have seen in another thread.

Contrast the chart below with my previous chart. In the previous chart an up Control Bar (Effort Bar) creates a Supply/Demand Delta Zone where a long signal occurs.

In this chart, A down Control Bar (Effort Bar) creates a Supply/Demand Delta Zone for a LONG trade. I like to see at least one (1) tick of the entry signal on or in the Zone. This trade is based on the valid Hammer Pattern where some of the candle lines in the pattern are within the Zone. But the actual Hammer line itself is not. If you think in terms of VSA sequences, some of the sequence is in the zone so it would be a valid entry signal from VSA as well. Again, Control Bars or volatility spikes are not trade signals. One still needs an entry signal method to use in/on/around the Control Bar.
Attached Image (click to enlarge)
Click to Enlarge Name: Price 6.png Size: 220 KB
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #123
  • Jul 29, 2011 1:02pm Jul 29, 2011 1:02pm
Hercs,
I am new to the CBAs, but I think you need to do some price action analysis on the bars after the CB. In the m15 example, let's say, as you questioned, there was not such an obvious retest back up to the red line, but rather that bar opened below the red line and closed below the low of the prior cande, and the high was the same as the open. Isn't that a good sign that you could short on the open of the following candle?

But maybe Karthik's method requires a retest of some kind before you can make the entry.

DrDave
Quoting Hercs
=====================================

Excellent trade this morning NS, but seeing that I have just read through your Thread once (and I am planning in rereading it until I get it completely), why did you not short immediately after the H1 chart closed BELOW the Red-line? Why drop down to M15 for confirmation? The price may not have come back to retest the Red-line which is shown in your M15 picture?

Kindly treat my enquiry based on the fact that I may have missed out on something very important and I apologise unconditionally if I did.

Thanks...
To free Gazans of Hamas, use whatever it takes.
  • #124
  • Jul 31, 2011 12:00am Jul 31, 2011 12:00am
Quoting Hercs
=====================================

Excellent trade this morning NS, but seeing that I have just read through your Thread once (and I am planning in rereading it until I get it completely), why did you not short immediately after the H1 chart closed BELOW the Red-line? Why drop down to M15 for confirmation? The price may not have come back to retest the Red-line which is shown in your M15 picture?

Kindly treat my enquiry based on the fact that I may have missed out on something very important and I apologise unconditionally if I did.

Thanks...

Hi Hercs...thanks for posting in here and apologies for the late reply...was busy with a few things over the past couple of days...

its a good question....what u r suggesting is a breakout trade...you wait for break of SR and immediately enter a trade in the direction of the breakout...but the problem with the breakout trades is that u r never sure whether it is a true valid breakout or whether the price is going to come right back again and prove to be a false break...in other words, when u enter on a breakout, u r just guessing that the breakout is a valid one...and guessing is not a very good way to trade....

but if it is indeed a valid breakout, 9 times out of 10, the breakout point will be tested,...and if its valid, the breakout point will hold and price wont come back thru it....thats why i switch to 15M and wait for confirmation that the breakout is a valid one....confirmation is done by waiting for a retrace and seeing PA at the point of breakout to see if price comes back thru it and proves a false break or price moves down and proves to be a good break....confirmation increases ur chance of success by atleast 200%...

another advantage of switching to 15M and waiting for a retrace is that u can trade with a small SL..usuallu retraces for valid breakouts dont retrace too far....if it retraces too far back, then u know its a false break...so u can have very small SLs when u trade the retraces....
  • #125
  • Jul 31, 2011 12:04am Jul 31, 2011 12:04am
and i promise to address each and every post made in here...just give me a bit of time but i promise that all posts will be attended to....
  • #126
  • Jul 31, 2011 12:43am Jul 31, 2011 12:43am
Hi Karthik,

I was thinking about how a CB is formed. Let's say a nice CB has formed on H1 chart. If we drop down to the M15, we see 4 bars that comprise that H1 CB. Have you considered examining the way these 4 bars look to see if there is a "story" to tell about how the CB was made? And if there is a story, is it useful for giving us an edge in understanding how price will behave on H1 after the CB? Maybe it is totally irrelevant; I'm just wondering if you have even evaluated this.

For example, the 4 bars could be all down bars that march down like soildiers. Or, the first bar could be very small, and start near the top of the range of he final CB, then the 2nd bar be a down bar of average size, then 3rd bar an inside up pinbar that has most of its small body near the top of the 2nd bar, then the 4th bar is a long down bar that creates the low of the H1 CB (4th bar probably is a CB on the M15, too).

So obviosuly, these two examples of sets of 4 candles on M15 tell us a different "creation" story, even though the final CB on H1 that each creates could be EXACTLY the same.

DrDave
To free Gazans of Hamas, use whatever it takes.
  • #127
  • Jul 31, 2011 6:31am Jul 31, 2011 6:31am
Quoting Hercs
NS, would you mind drawing the Bars for yesterday and today on the Cable, plse?

Here is my attempt fwiw and your comments plse.

Thanks in advance.

hi....the bars looks right basically....but u need to be careful that u trade only the ends of the bars and not anywhere in between...u need to develop the discipline to ensure that u sit on ur hands when price is between the control bars or away from it and also be ready when price comes near the ends of the bars...
  • #128
  • Jul 31, 2011 6:34am Jul 31, 2011 6:34am
Quoting HiddenGap
Not exactly the same thing I know, but I believe the Effort Bar in question would qualify for a Control Bar.

Here's something to keep in mind. Many times the High Volatility bar will be associated with a news release. The Effort Bar on the chart below was caused by the Jobs release. Now one has some sense of the price action PRIOR to the any trade signal that may occur.

From my perspective, the Effort Bar (or Control Bar) would not be a trade signal in and of itself. Once the Effort Bar appears and we have Price Action that either confirms or...

thanks HG for ur continued contribution to this thread...feel very happy for that...everyone is needed to carry the thread fwd....i cannot do it alone...and yes, the effort bar does look like a control bar...and yes the appearance of the bar in itself doesnt tell us anything at all...only the PA at the ends of the bar will tell us what is going to happen....
  • #129
  • Jul 31, 2011 12:55pm Jul 31, 2011 12:55pm
Hi Karthik,

Is this the correct way to try to trade a breakout?

DrDave
Attached Image (click to enlarge)
Click to Enlarge Name: 2011-07-31_18-24_CBA-1.jpg Size: 140 KB
To free Gazans of Hamas, use whatever it takes.
  • #130
  • Jul 31, 2011 1:19pm Jul 31, 2011 1:19pm
Quoting Villonius
Excellent Thread Karthik

Please ignore the haters and carry on with educating those who are open minded enough to embrace new ideas.

I've attached an update on the CBs you showed in EUGBP. Interesting results when you run a fib from the H of the 1st CB to the low of the 2nd CB.

127 and 144 Xt held the BO for the 1st couple of days and 50 held the re-traces. I know this is not strictly ur method but it is interesting nonetheless.

4 Days later the low of the 2nd CB was still acting as support (1st test) Now we have a new CB marked from 08795...
Hi Villo,
to be honest, i wont be combining fibs and cba....i believe that it will only complicate things....i use just the control bars and i dont try to split them further using fibs.....when u start doing that, u would be tempted to take trades at 61.8 or 50 which would then mean that u would be trading within the control bars which isnt a good idea...just focus on the control bars and trade the extremes of these bars...
  • #131
  • Jul 31, 2011 1:22pm Jul 31, 2011 1:22pm
Quoting Villonius
Hello Karthik

Here's a chart of EURUSD H1 containing all the recent CBs which I've labelled CB1- CB5

Working through the PA it now starts to all make sense. The green area is a previous supply now probably demand zone.

CB4 resist all bulls during Asia session and the high of CB2 contains the bulls from London session.

Why did CB2 hold london bulls ? My guess is because momentum and break out traders who bought Thurs Fri or early Asia Tues got trapped by CB4. So when London open reached that area many took the chance to get out at BE. Prob...
if 2 or more control bars appear near each other, i dont take the high and lo of each bar...rather i take the hi and lo of all the bars together...in ur chart, cb1 and cb2 appear close to each other and so i take the low of cb1 and high of cb2 and mark them off for observation...i dont mark the hi and lo of cb1 and cb2 separately....why? the reason is that cb1 and cb2 together form a specific price action and they are split into 2 or more bars just cos of ur broker times....ur broker timings are irrelevant to the big boys....
  • #132
  • Jul 31, 2011 1:30pm Jul 31, 2011 1:30pm
Quoting clinicomp
Hey Karthik nice to see you here too, have a question: what combination of TFs do you like?, I was seraching for CBs on 1 hour and traying to find entries on 5 min, but got a lot of false signals. Maybe is a good idea to use 15 min to find entries, isn't it?
Please keep posting, I like your style...
i mainly use the daily charts to find areas of SR and trade them off hourly charts...sometimes if i am too bored and want to do day trading, i use the hourly charts to mark the regions of SR using CBs and trade off 15M...5M is lot of noise and u cant trade them unless u r quite experienced....trading off 5M charts gives a lot of false trades but in between, they also help u to catch big trades right at the top or bottom...but u need to be able to handle lot of small losing trades and also to handle the one big trade that comes along....
  • #133
  • Jul 31, 2011 1:31pm Jul 31, 2011 1:31pm
Quoting Cosi
[font=Calibri][size=3]Hello everyone. I’m new to this forum & stumbled on to this post. I tried trading HLC Bars last night and looking for input on whether I got lucky or this is correct use of HLC Bar… I have HLC set for rising green and falling red, noticed that I would see a blue bar come up now and then. On Aud/Usd I entered a short at 1.1000 when blue bar came up on 5m chart, combined with slow stoch confirmation (on multiple time frames) I rode it down to just past next blue bar at 1.0939, up 70 pips. I reversed position at 1.0940 as per...

i dont think anyone can answer this unless we see ur charts...
  • #134
  • Jul 31, 2011 1:56pm Jul 31, 2011 1:56pm
Quoting ns_karthik
From today, i will be posting control bars for EU and GU and i shall be day trading and swing trading based on those...attached is a 15M EU chart from today with the control bar marked as A..
what a load of tripe
rat
  • #135
  • Jul 31, 2011 4:36pm Jul 31, 2011 4:36pm
Quoting HiddenGap
Full disclosure: I did not take this trade as I was not at my computer this morning .

I don't want to overtake this thread, but there was something I did want to point out.

The direction of the Control Bar does not necessarily dictate the direction you should be looking to trade. This is in contrast to some other types of "supply or demand zones" you might have seen in another thread.

Contrast the chart below with my previous chart. In the previous chart an up Control Bar (Effort Bar) creates a Supply/Demand Delta Zone where a long...
HG,

I've noticed that you mainly show examples from the ES. I've read elsewhere you've shifted mainly over to the ES because you find forex volume unreliable now. I was hoping you could post some examples based on Karthik's bars on forex because it would be good to see how you would use VSA concepts to enter on Karthik's WRB bars in forex.

Thanks
  • #136
  • Aug 1, 2011 12:39am Aug 1, 2011 12:39am
Quoting DrDave
Hi Karthik,

I was thinking about how a CB is formed. Let's say a nice CB has formed on H1 chart. If we drop down to the M15, we see 4 bars that comprise that H1 CB. Have you considered examining the way these 4 bars look to see if there is a "story" to tell about how the CB was made? And if there is a story, is it useful for giving us an edge in understanding how price will behave on H1 after the CB? Maybe it is totally irrelevant; I'm just wondering if you have even evaluated this.

For example, the 4 bars could be all down bars that march...
Hi Dave,
each control bar in whatever timeframe u look at, would be made of bars from smaller timeframes of which atleast one or more would be control bars in that timeframe. For eg., a control bar in hourly chart would be made of 4 15M bars and one or more of these 15M bars would be control bars in the 15M chart...i havent tried analysing it this way...maybe it is something worth to think abt...or maybe not...i am not sure....if u have come up with something, let us know...
  • #137
  • Aug 1, 2011 12:42am Aug 1, 2011 12:42am
Quoting DrDave
Hi Karthik,

Is this the correct way to try to trade a breakout?

DrDave

Hi,
the idea is correct but i would not advise u to use 4H charts...i suggest that u use any other chart from any other timeframe but surely not 4H. The reason is that the 4H bars are split according to ur broker time which varies from broker to broker...so i never use 4H timeframe...
  • #138
  • Aug 1, 2011 1:20am Aug 1, 2011 1:20am
Quoting ns_karthik
Hi Hercs...thanks for posting in here and apologies for the late reply...was busy with a few things over the past couple of days...

its a good question....what u r suggesting is a breakout trade...you wait for break of SR and immediately enter a trade in the direction of the breakout...but the problem with the breakout trades is that u r never sure whether it is a true valid breakout or whether the price is going to come right back again and prove to be a false break...in other words, when u enter on a breakout, u r just guessing that the breakout...
===============

Many thanks for your time firstly, but secondly for a full and sensible reply. I have seen it happen, but have not understood what you have just given me in plain English. Much appreciated.

Wishing your long pockets and short arms.

Best regards.
Hercs
  • #139
  • Aug 1, 2011 4:19am Aug 1, 2011 4:19am
Hi Guys

I'm fairly new to the Control Bar methodology but I dug out and read the info on WRB that Hidden Gap referred to recently. Interesting stuff.

Here's a chart. Notice how Support at S1 of CB1 now acts as resistance. Karthik has pointed out that often CBs run sequentially in which case he considers it as just 1 big CB. That's fine but I feel it's worth at least drawing the line of the extreme of the 1st bar. Notice how the high of CB3 R2 acted as support S2 in Asian session.

Any comments please fire away.

A question for Hidden Gap on the WRBs. With candles the WRB is considered to be the body of the candle but with range bars they use the high and the low of the bar as the WRB. Why the differentiation when both methods display identical info just in a different visual way ?

Regards to all



V
Attached Image (click to enlarge)
Click to Enlarge Name: eurmoncb.gif Size: 29 KB
  • #140
  • Aug 1, 2011 2:24pm Aug 1, 2011 2:24pm
So, maybe a trade strategy to go for the first breakout is right after you are in the breakout trade, immediately set a stop-and-reverse a few pips back across the line. Then if it really were a false breakout and it comes back to your stop before TP is hit, you are immediately starting to recover lost pips.

DrDave
Quoting Hercs
===============

Many thanks for your time firstly, but secondly for a full and sensible reply. I have seen it happen, but have not understood what you have just given me in plain English. Much appreciated.

Wishing your long pockets and short arms.

Best regards.
To free Gazans of Hamas, use whatever it takes.
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