Trading Daily Trends from Panama

The purpose of this thread is to help organize my thoughts and to track the evolution of my trading practices. I have found that a computerized, diary formatted trading journal just does not do it for me. I am hopeful that this journal will provide a bit more structure and incentive to create better record keeping and be more fun than a typical diary.

The TFs that I use are W1, D1 and H4 largely do to my time constraints and belief that the psychology of the larger TFs simply works better for me. The pairs/symbols are limited to 20 for similar reasons. In fact only 10 are actively viewed in a typical week, and of those only 1 or at most 4 are going to be traded. Some weeks there may be no trades if I am not happy with the setups or am otherwise tied up.

More detail to follow this weekend on my next posts.

INTRODUCTION:

In brief this is a Trend following approach. I am looking for strongly trending pairs to enter and take add-on trades on the break of Fractals following pull backs and resumption of the Trend. I use a variety of indicators for confirmation, but primarily I am using Price Action (PA) with a moving average cloud and fractals to guide the trades. A pair is trending if Price is leading the Cloud and the Cloud is above or below the 100 SMA. All other configurations are Counter Trend (CT). CT trades are possible in selected situations, typically at reversals of higher TF Fractals.

Pair identification is critical as there is no point in attempting trending strategies on non trending pairs.

Finding the Pairs:

My platform provides more than 50 pairs to choose from, some of which I have never heard of. I needed to narrow the list to a manageable number, so I have arbitrarily chosen 20 of which 10 are what I call Tier 1 pairs, visually the best performing pairs.

Complete list (20):

Majors: EURUSD, AUDUSD, GBPUSD, USDCAD, NZDUSD
USDJPY, NZDUSD

Crosses: EURGBP, EURJPY, GBPJPY, AUDCAD, GBPAUD,
EURAUD, EURCAD, AUDJPY

CFDs: S&P 500, NASD 100, XAU, XAG, US OIL
Called “pairs” for the sake of convenience

Scanning Thumbnails:

Attached are the layouts for the coming week, W1 and D1, that I will use to further select 1 or more pairs to follow more closely during the week. A comparable layout is setup for the remaining Tier 2 pairs. Both layouts are scanned on the weekend, and if necessary, pairs are switched (infrequently) from one to the other. The Tier 1 layout will always display the Three Amigos; eu, au, gu and 2 CFDs. The corner Thumbs are independently linked for ease of switching pairs.

Each Thumb has nested W1, D1, H4 charts. For this layout I only use Japanese candles.

Indicators:
5,21 EMA Cloud ; 100 SMA on D1 and H4
Traders Dynamic Index (TDI)
MTF Heikin-Ashi (HA) heatmap

Threads on Forex Factory that I follow for the Indicators:
TDI – Britpip 7
Trading Made Simple for Day Charts
http://www.forexfactory.com/showthread.php?t=334035
MFT HA – Hugh Briss
Swing Trading with Heikin-Ashi and Stochs
http://www.forexfactory.com/showthread.php?t=340556
Quick and Dirty EOD
http://www.forexfactory.com/showthread.php?t=370607

I do not usually trade on Sunday evenings - something about not trusting the Market Gods. But based on my preliminary review of my Tier 1 layout, it looks like the AUD pairs are off to a good start, but could use a breather ie pullback before resuming their trends. AUDUSD and GBPAUD are at RSI 50 and AUDCAD is seriously stretched at RSI<32. All are in CT postures on the D1 TF, but this week that could easily change for the AUDCAD in particular.

I have attached review charts for AUDCAD D1 and H4. Lots of good pips but on a CT move over the last 2 weeks.

Tier 1 changes: None

Pairs Status: WATCHING AUSSIE PAIRS

EU: I am not crazy about this pair. The W1 is in a good (-)Trend but the D1 is very weak RSI 50 and flat.
AU: This pair looks good with solid, smooth (-)Trend underway on both W1 and D1. W1 falling from RSI 68 and D1 has broken RSI 50. Watch for SHORT after pullback
GU: Another just like EU but worse. Flat across the board.
UC: Solid down trend but choppy PA now weakening. W1 trip from RSI 68 to 32 and D1 RSI bottoming below 32. Expect short term CT rally. May become trade-able.
S&P: Grinding uptrend now near Major resistance at 1435. D1 RSI>68.
EJ: Solid but choppy (-) Trend on W1, but D1 is grinding out a CT with RSI nearing 68. Possibly Downtrend will resume.
AC: Similar to UC but inverse and much smoother. D1 has traveled from 68 to 32 and looks like possible reversal. If so would be a Trend trade. Note however AU is breaking down.
GA: Had been in a solid, smooth (-) Trend W1 from RSI 68 to 32. Now turning up. D1 rising but still below 100 SMA
AJ: Similar to S&P
OIL: Similar to S&P but with better impulse for W1 RSI. Looking toppy on D1

Hello Albinagrande,

Nice thread! I'm interested in your re-entry method. Can you explain this a bit more for me? I understand the concept but it's not clear from the screen shots as to how decisions were made for re-entry.

I am assuming "in" on your screen shots means that you entered in at that point?

Thanks for your time,

Joe

Hi Joe, Thanks for your inquiry. The "in" candles are Inside Bars found by a Pattern recognition screen. So far I only screen for those. My journal is very much a work in progress - I hope to add some more this weekend. Basically re-entry will be on the breaks of fractals as described by Britpip 7 tho I am playing with HA candles as well. Good Luck!

After 2 months (400 pips) of steady rise, the Green cloud, D1, has broken and given way to what could be the early stages of a protracted Reversal. The major next Goal to the downside is 300 pips away at parity. Meanwhile, taking it one leg at a time, we are still a few pips above the 100 SMA and fairly strong S/R with several fractals - look left- laying in wait at ~1.0300.

The attached charts and notes are self explanatory. The D1 chart shows W1, D1 and H4 TFs and is used to evaluate the Trend. The H4 chart is used to try to "fine tune" the trade. I will place an entry order the far side of the closest D1 fractal. If I can enter at a better level, I will do so and cancel the D1 entry.

I am currently SHORT at 1.0327 with a SL at 1.0392. So D1 entry at 1.0291 was cancelled. I regard this as a Counter Trend trade, ie above 100 SMA.

New indicators:
Fractals(5) for Support/Resistance levels - dotted lines = Default TF, Black arrows = 1 TF higher
Pattern recognition for Inside Bars

I guess that the biggest news this week was the dramatic Wakening of the Gold and Silver complex. The $Silver:$Gold ratio showed a nice pop, and the shares are also looking brighter. Still early but looking for a PullBack to BUY.

Tier 1 profile: Replace OIL with XAU

Pairs Status: WATCHING AUSSIE PAIRS and XAU/XAG

EU: Thinking about SHORT. Good W1 down trend. D1 up near 100 SMA and RSI curling at 68. Watch for HA change to Red.
AU: Looking at a SHORT here, BUT TOO FAR ABOVE 100 SMA
GU: D1 trend is up with RSI pulling back from 68. Thinking LONG after PullBack.
UC: W1 oversold at RSI 32. D1 starting CT rally.
S&P: How do he do it?? Still up trends on W1 and D1 with pullback. Look to go LONG if breaks 1425
EJ: W1 CT rally stalling. D1 curling just below RSI 68. No clear action just yet.
AC: See separate Post
GA: I like this pair!!! Good CT rally about to go Trend. D1 RSI at 68. Go LONG on PullBack
AJ: W1 in the Doldrums. Avoid for the Moment.
XAU: After months and months, finally some action. BUY on PullBacks.

Remember that these comments are just chatter. The action is in the charts.

Lots of computer issues for the past 2 weeks, and we are about to go to US for Pat´s parathyroid surgery in Tampa.

Aussie pairs have trended well for the past month. I have been interested in AUDCAD, GBPAUD and AUDCHF.

Again the best strategy would appear to be spotting a durable trend on D1 with price leading the Cloud then placing Entry orders on the H4 TF at either Fractal breaks or better still when price has a mini-retracement back inside the cloud. The advantage to the latter is that a much tighter stop can be placed on the far side of the Cloud for a better R:R ratio. Then the position can be added on to once price rejoins the main trend and all prior positions are at BE or better. Just watch for additional mini pull backs signaled by candle color change, HA/Japanese. If the trend is strong and stable, precision is less important than in the instance of a choppy trend often seen with CAD and GBP pairs.

Watch RSI(10) for breaks of 50 level and subsequent Channeling above/below 50. Mini pull backs usually correspond to RSI mini extremes inside the Channel.

Currently we have a CT move below the 100 SMA(D1 and H4). So far it looks more like a 2nd Pull Back, but if D1 PA closes above the Cloud and above the 100 SMA, we could see a full on reversal.

I am first to join you