Using the DASR for successful trading

Hi everyone

I've decided to share my system as a "trading journal" because after I've shared it with you I'm hoping that many of you guys will join me in actually trading it live. I've been trading it on demo for 6 weeks and have turned $600 into $7000 so to say the least it must have some merit (I will post my trading statement for you in my next post).

A couple of days ago I had no intention of doing this – i.e. starting a trading journal. However, I was reading through the “Trading made simple for Day Charts” and I noticed how many times the guys are opening trades at the wrong time (and of course in the wrong direction). Through no fault of their own of course. They are trying to follow some system (of which there are many around) using buy/sell indicators. The problem with these buy sell indicators is that they are often fake-outs – many times the price has been going in a certain direction for some time and suddenly it spurts, moves quickly, and the indicator will tell you to take the trade. However, often this “spurt” in the price comes at the END of a move and you are summarily caught in a bull/bear trap!

So I decided to share my trading method. It is NOT the holy grail. There is no holy grail because price movement is always going to be unpredictable – many factors can cause the price to move and of course when price action is flat or ranging price action can whipsaw around without reason.

So what we have try to do is (a) filter out the bad trades and (b) most importantly get into the right trades at the RIGHT TIME using correct management (as always) to protect our trading balance.

Before I actually get into the system, I'm going to talk about TIME.

I'll get to that in my next post

Sorry I'll post next in a couple of hours cause I'm going to watch a movie

Subscribed mate, looking forward to your next post.

OK next instalment. By the way, the other problem with using those buy/sell indicator type systems is that they often give a buy or sell signal long before the price actually turns. Eventually taking out your stop loss or draining your trading account. I know because it's happened to me more then a few times in the past!

Anyway as I said I first want to talk about TIME. It's quite important to be trading the the right time frame - at the right time of the day - and also if you're mainly trading the 4hr chart (which you are with this system) then you need to have the candles opening and closing at the right time (I'll explain that in more detail).

1/ TIME FRAME
I think it's really important to get one thing right if you want to be successful in forex trading. That is you want to initiate trades on the higher time frames. The lower time frames (even the 1hr) can give a lot of false signals and really the name of the game is to eliminate false signals!! At least I use the 4hr chart or you could even use the daily chart although then good trading setups may be days apart. You'll understand this better when you actually see the system chart.

2/ TRADING SESSION
The best time to trade is obviously when price movement is going to be the most. Especially if you're trading the Euro or GBP pairs, price movement is greatest (and thus you are going to have the most pips) when Frankfurt/London and London/New York overlap. Usually that is around 7.00am – 5.00pm GMT. I especially watch the 8.00am, 12.00pm and 4.00pm candles on the 4hr chart. One sees that reflected in the charts constantly.

3/ TIME ZONE
I've seen this question on the forums and it's true that MT4 platforms work in different time zones depending on your broker. This doesn't make a difference on the 1hr chart but it DOES on the 4hr chart and daily chart. Don't ask me why but I think that it's got something to do with the large financial institutions that move the price but I have definitely found it's better to use an MT4 platform that is set to CET time zone. That is: the 4hr candles open and close 8.00am, 12.00pm, 4.00pm etc., central european time. My broker's platform is not on CET so what I do is look for trades using an AlpariUK demo MT4. Doesn't really matter who you use as long as their platform works on CET. Again you'll understand better when you see the example charts that I'm going to post.

Well that's it for today. Tomorrow I will explain “DASR”, why it is so vital, and post some charts.

Rgds

Jerry

Oh, just want to apologise to the pros on this forum who are making good money already. I'm probably telling you things that you already know well.

I'm aiming this for the rookie trader and perhaps even the more experienced amongst us can learn something.

Even myself from comments that you might make (I've only been trading for 3 years).

Rgds to all

Jerry

Sorry,

forgot to post the statement.

Hi Jerry,

I'm very interested in following your thread and I'm going to subscribe. I hope to learn quickly to achieve such extraordinary results as yours.

Many successes.

Hello Jerry

I am looking forward to your charts and indicators.
Thanx for sharing your system.
Gr Jan.

Hi everyone

OK now to my system. As probably some of you more experienced traders have worked out, “DASR” refers to the “DYNAMIC AREA OF SUPPORT & RESISTANCE”

I first learnt about the DASR two years ago from a guy who was offering an online forex training course. He explained it all really well and I understood the concept. Basically the DASR is created by price action and follows price action as it trends up or down. It's a level or zone to which price action eventually returns either stalling and re-trending or shooting through to start a new trend. He uses the 30,50 and 100 SMA's which work reasonably well, but again because I was glued to the lower time frames, I battled with fake-outs. Also sometimes there is a big gap between the SMA's which can lead to high margin for error!

Only recently really, I have been experimenting with vegas tunnels and a couple of months ago, eureka!! I noticed that the daily vegas tunnel very accurately tracks the DASR. Adding a couple of other indicators like BRN (big round numbers) horizontal lines and fib pivot points – and hey presto! Suddenly you're looking at an interesting chart (I also use the 1 hr vegas tunnel on the 4 hr chart - it accurately shows up the prevailing daily/weekly trend).

Here's an example below. I've circled with a yellow pen 11 areas over the last month on the 4 hour EURUSD chart which were excellent trading opportunities. In actual fact there were more because on 4th/5th January you could have gone down to the 1 hour chart (I will explain that in more detail later):

Sorry forgot to mention that later on I'll explain better with a few examples how I look for entries and also track the trade still using the daily vegas tunnel but on lower the time frames.

The great thing about this system is you are not chasing trades! YOU ARE WAITING FOR PRICE ACTION TO COME TO YOU!!


rgds

Jerry

Sorry forgot to post the indicators and also I've posted my template.

With "gridbuilder" indicator you must set the input to "500" to get horizontal lines at every 50 pips.

PLEASE FEEL FREE TO MAKE COMMENTS OR ASK ANY QUESTIONS!



Rgds Jerry

Hi Jerry,

The indicators and the template work very well and I have a screen similar to yours.

Can you please explain now what are the conditions for the Buy and Sell?

Thank you very much.

Nice set up mate, Let me guess........ You look out for pin bar's ?

Looking foward to your next post

OK. Just a little bit more about the DASR “Dynamic area of Support or Resistance”. You are probably asking why it's so important? Well I'm not going to go into a lengthy lesson on what moves the market but suffice to say (especially when the price most definitely in an up or down trend) the “market movers” do not move the price in one go – you've probably notice that price moves quickly, retraces a bit (or sometimes a lot) and then shoots off up or down again. What is happening is that the MM's (whoever they are!) are RE -LOADING their trades. Now that RE-LOAD point is almost always around the DASR. Got it?

So, logically, we are going to be waiting at that DASR area to enter WITH the big guys in the correct direction for a few pips.

Here's some examples – this morning at 9.00am (GMT). Because the Euro is in a very strong down- trend at the moment you can go down to the 1 hour chart to look for entries. I've circled the area. There was a nice 30 pips this morning - 2680 down t0 2650

Also back 0n 5th and 6th January – strong down-trend – you could then use 1 hour chart to find 2 very nice entries for min 50 pips (circled in yellow)

Good to see you start new thread and helping others.

thank you, Irene!

Right.
Think you can more or less see now what we are doing here - We are now trading with the PRO's or the BIG GUYS!! I can guarantee to you that many small retail traders would have been long on the EURUSD this morning. Not saying that they may be right in the direction eventually BUT have you ever tried to swim upstream in a river against a very strong current? Very difficult and you may not make it – that's exactly why you HAVE to “go with the flow”!

So obviously, what we are looking for is a FAIL of the area of DASR. Either on 1 hour chart (in strong trend) or 4 hour chart if price action has broken through DASR on the 1 hour chart, it's going to be heading for the DASR on the 4 hour chart. We are NOT going to trade until it reaches there! Then we are going to look for a fail of that area of DASR.

Here is another nice example on last Fridays GBPUSD 4 hour chart – notice how price action failed off the 4 hour DASR after briefly penetrating it (circled in yellow):

I will be following to learn.
Thanks

Got to go out guys, but tomorrow I show how I set up my trades and also how I track my trades.

Please feel free to make any comment or question!


Rgds

Jerry

The system look liked promising and not complicated .I liked it and will try to start demo trading it.
Waiting for your tomorrow posts and how about the Risk:Reward you set on your trade.

Thanks for posting your method Jmtini, looking forward to the update tomorrow...