Trading Made Simple for Day Charts

Hi Britpip7,

Glad you are back.
About those categories... Where did you read about them? How would they affect our trades or decision?

This just comes down to lots of screen time on the live charts and confirming what certain pairs do.

I look for the ranges - previous swing Highs to Lows / ranges betweeb high and low Fractals before I make ant entry decisions.

If the 100 and 200 EMAs are running close and horizontal, the pair will be consolidating, so plan to wait it out until you get a clear break and close above / below toe 100/200ema.

Keep reading the threads - the Trading Mde Simple thread started it all - Eelfranz and dcginc are worth reading - they are not posting at present but they have some great materials. Also XMan has a ton of good reading.

Reference material also quoted on Post #1

The 3 amigos and their friends are still showing lots of pressure to go lower.

Recent Fractal Low breaks.

How would you know if a reversal is actually a reversal? I saw this potential trade on EURGBP on May 18th. It looks like a reversal and it fulfills the ATR and RSI criteria but I am not sure if it had been a profitable entry (would have still been on) as the reversal move was stopped after two candles. The next fractal is more than 2xATR7 away too.

Great question.

This is not a pair that I trade after the SNB fixed the eur/chf rate and killed off any decent moves in that pair and the eu/gbp.

This was a valid Set Up based on your observations, even though the major trend was against you. Basically, you never know when a breakthrough will hold and turn into a reversal.

From my chart, I would have set this up for a pending buy stop off of the high of the 5/17 candle with the usual 2xatr7 TP1 and SL settings.

The Entry Candle would have triggered the trade on Friday and would have achieved 50pips by cloee on Monday. This where you can look at there the Monday Low was and it had cleared the entry point, so would have allowed you to move the SL to a Break Even level. Easy to say in hindsight, but a possibility never the less. There were no real signs that the next candle would reverse so not much you could have done without the SL to BE.

If you were still in the trade it would be at - 45pips with a possibility that it is losing momentum again and may reverse from the double bottom from Wed/Thur.

Put this one down to experience and paying the forex gods

I want to show here a simple method for trending any pair on the 4H timeframe.

It uses simple indicators: Osma and Alligator lines for trending plus a Round Numbers indicator for entries

As trend is down (price below alligator lines and osma negative) we take shorts at every up retracement to the round numbers (see arrows in pics).

Viceversa for long.

It's simple, clean and works out good also in choppy markets, identifying clearly the ranges.

regards
Alex

Still tracking GU lower and it is now nearing major support area.

Pip Protection Policy is something that I am running where I close out TP1 early as a trade loses momentum / enters areas on Major S/R.

This is often a strategy that I use for Friday trades that start to stall so that you can take some pips out of the market and leave the second position running with a break even SL.

Big E would talk about closing positions that started to pull back and then look for re-entry positions, so this is an adaptation of that approach.

My approach with running two entries per trade and the ATR7 approach is from dcginc. Remember, if you run with two positions and close the first for profit and move the 2nd SL to BE, it is still a good pip day and it removes the stress for leaving 2 positions open over the weekend.

I went short on EURUAD as TDI and RSI both closed below 50.

Let's see how it unfolds.

Week trend is still strong so should carry the day lower. Watch for a pause at the support around 1.2750.

Currently still short on GU and watching the gbp nzd short plus aud chf long

Nice 100pip channel for a breakout opportunity - Weekly chart is suggesting Support

Current Week trend down but may be just a pull back.

Hi Britpip7,

Would you mind sharing your experience with different EMAs? What values would you recommend? I must confess I don't know much about their role in this system apart from that they act as dynamic support and resistance (still reading the old posts). I read in another thread that the trade should be always "away from MAs". What do you make of that?

As an example, I'll use the current GU day chart for this one.

Many folks use MA crosses and whether they are EMAs (exponential) or simple/smoothed (SMAs), there is little difference, especially on the larger ones.

The classic MA cross for entry signals is 3/8 - Lawgirl had a great thread running on that approach, and Big E was initially using the 5ema as a signal once PA closed above / below.

Big E had a couple of strategies before finally settling on the TMS with the TDI cross and one of those used 23/233 (I use 21/200) Once the 21 clears the 200, the trend should be good for add-ons.

With the 100 and 200ema often acting as dynamic S/R levels you are looking for a bounce away from the ema, or a cross and close above / below (breakthrough).

With the GU chart examples, you see a change in direction on 4/16 which starts to pull away from the 100/200emas (TDI cross would have confirmed 4/18). 21ema is already above the 100/200 which would favour a long move. This runs for 400 pips before hitting the brakes.

So now you are in a position of no longer moving away from the 100/200emas (so rules with longer term emas don't really work here!) - there was a TDI cross after 5/1 (and this would be from the overbought zone >68) and now the direction starts to reverse and fall back towards the 100/200ema. Basically, look to the 100/200emas as gravity in this instance, pulling the price back to earth.

So now the decision is when to take the reverse on the day chart. You can take the TDI cross, which would have got you in on 5/1, 5/2, or following the RSI rules of waiting until <50, then you have to wait for the pause around 5/7 to 5/14 and then take an entry. With this reversal, it has such strength that it punches through the 100/200ema, pauses and then goes again, this time moving away from the 100/200ema. Now the question will be at what point will the 100/200ema pull the price back again and set up the next reversal.

Mostly, this is down to trading style - trend traders will trade away from the 100/200ema and the reversal traders look for reversal signals to head back towards the 100/200ema. This is where having a combination of approaches will pay off.

Once there is a 300 to 500 pip gap between price and 100/200ema, there will usually be a pause and eventual reversal - or, the price will consolidate for a while and allow the 100/200emas time to move to the price.

Hope that helps.

With the massive swings that we are seeing in the market, take care on the reversal signals. TDI is severely oversold, as are most other indicators, so any pause / uptick will look like a reversal signal. These may just be the market breathing, so wait for confirmation candles - after all a day or so waiting won't kill you!

Unitl you see confirmation, these signals will more likely be continuations than reversals.

I'll post some trade summaries over the weekend - too much activity to post much at the moment

Happy pip farming

Trading has slowed down, so here's the last week's summary - currently not looking at any new entries / add-ons until after NFP announcements - all stop loss settings have been moved up accordingly, so now it's wait and see what the NFP brings.

Reversal signals will need confirmation, so no early entries on TDI signals until the cross is confirmed on 2nd candle.
Continuation patterns may be worth a look after the H4 candle closes after NFP.

GBP USD
TP1 closed early for +110
TP2 currently at +320
Add On 1 at +120
Add On 2 at +80
SL has 600pips locked in

GBP JPY
TP1 closed for +120
TP2 at +320
Add On 1 at +110
SL has 320pips locked in

EUR USD
TP1 currently at +130
SL has 100pips locked in

Pips from closed trades and SL = 1,250

Total risk currently with 5 open positions as above for 360pips

Didn't get around to trading this until last week.

TP1 was closed on Friday - 5/25

TP2 still running with 2 add-ons

Add-On 1 was taken from the Day Fractal Low

Add-On 2 was taken on H4 Fractal Low

Not sure who won the competition for the weakest currency this morning.

Following the UK and US data releases, both remain weak with the EUR still in deep poop! No clear winner in the competition for whose currency sucks the most, but it appears as though the Dollar may suck less then most of the others! Cetainly this would appear to be true if you are viewing the currency indexes the Dollar is the strongest - go figure!

Seeing as my gbp/usd and eur/usd trades got stopped out ( +800) with the NFP spike - not unexpected and I was prepared to risk the positions that were still open with the trade management that I had set up, so no tears (OK, only small tears at burning 200pips on the 4 positions - hindsight versus live trading), I am in a wait and see mode - the usual NFP stupidity has calmed down and it looks like the gbp/usd is continuing to push lower again.

GPB/JPY still running and pushing lower - looking for another add-on on H4, but this probably will not happen today. I have moved my SL again to the previous H4 high, so this locks another 50pips each on the open positions (TP2 and 1 Add-On), and allows 70pips of breathing space. With TP1 and the current locked in pips, this trade is sitting at +680.

EUR/AUD looking promising so long as PA continues to support the current push higher - not looking at big numbers, so maybe 200pips max as it is in a range at the moment.

Most USD pairs and JPY pairs stay in a continuation pattern. Possibly looking at AUD and NZD pairs for some reversal action.

Here's the current activity - entries taken on the Day charts with Add-Ons taken on H4

EU showing a nice reversal signal (along with others), but as always, I will be waiting for the day candle to close.

Looks as though all of the talk of EU hitting 1.2555 is running to its conclusion. Now that the EU has had its mini correction / stall there will be some fresh signals - never been too keen on entering a reversal after such a long run, I'd rather sit out for a few days.

What next?

Maybe look at AUD/CHF or AUD/NZD and get away from some of the hype. I am out of the market until I see a signal that I like.

Hi Britpip,

Thanks for the thread, its great! I'm trying to find something that works for me on Daily charts. I have a few questions though.

How come you decided to drop the TDI indicator?

Which APB indicator are you using? Synergy APB or Synergy APB2?

Also would you consider posting your most recent MT4 template?

Thanks in advance,

Expat Trader