As most visitors must have observed, the Masterchart and 1000 PPAA has been a realiable guide for trading in the long-run. When a system is good what do you? You simply continue to look for ways to improve it. What I will be sharing with you over the next few days is two other ways of trading the 1000 PPAA in the short to medium term through 100 PPAA and 500 PPAA. The principles for this analysis are the same for 50 PPAA. These are the steps to take:
1. For 100 PPPA divide your Mastercharrt levels into 100 pips levels each using round figures e.g for GBPUSD the levels will be at 1.5300, 1.5400,1.5500, etc. It is crucial because price movement respect 100 pips circles.
2 For 500 PPPA divide your Mastercharrt levels into two equal parts of 500 pips levels each using round figures e.g for GBPUSD the levels will be at 1.5300, 1.5800,1.6300, etc.
3. The third step is to watch how the H4, daily and weekly candles behave around these levels for better understanding of clear trends within 1000 pips price movements.
I attach the current monthly and weekly GBPUSD charts for the 100 PPAA for now. I will attach the chart for 500 PPAA later. Replicate this levels of your charts for other major pairs and see price action in a new light. It is better to have different separate charts for these PAAs to avoid congestion and confusion. As usual, use weekly pins to know reliable resistance/supports. Can you see clearly the average pips size of a monthly and weeky candle?
Hello Articulate
Would it be recommended to try to master the Mastercharts trading style on its own and ignore any other systems, until I become proficient with the Mastercharts.
Yes you can, provided you can use Masterchart System in conjunction with the following associated principles:
1. Masterchart levels
2. Lines in the sand
3. 1000 PPAA
4. Weekly pins
5. Weekly concrete zone
What you need to do is to first read and understand all my posts on the principles listed above and try the system on a demo account for sometime to test your understanding of the system. You can post the questions you have here and I will share my views on them.
Hello Articulate
Would it be recommended to try to master the Mastercharts trading style on its own and ignore any other systems, until I become proficient with the Mastercharts.
In continuation of my monthly updates, I will post the updates for some major pairs for trading this month starting with GBPUSD. The key to making the best use of these updates is to pay attention to the weekly pins. Remember Weekly pin is a confirmation of a failed bullish/bearish price action.
Here is the monthly update for GBPJPY. 130 is holding as the barrier to the bullish run which began about six months ago. The target is 133-135, but 130 has to give way, price made two attempts in Sept and October and failed. The pair is currently trapped (consolidating) between 125 and 130. Will 130 hold or break? Follow the weekly candle.
Attached Thumbnailshttp://www.forexfactory.com/attachme...1&d=1351964371http://www.forexfactory.com/attachme...1&d=1351964371
This is a pair that has recenty attracted my interest. I am actually paying more attention to AUD pairs at the moment. Look at the clear trend on the weekly chart between the lines in the sand. Four straight weeks of bearish run so far? Will the bearish run continue for another 8-10 weeks? Let's wait and see and follow one candle at a time!
Attached Thumbnailshttp://www.forexfactory.com/attachme...1&d=1352105627http://www.forexfactory.com/attachme...1&d=1352105627
As I have mentioned before, the Masterchart for AUDUSD is 1500 pips divided into two equal parts of 750 pips each i.e. 0.9500, 1.0250, 1.1000. If you look at the monthly chart 1.0250 has been holding for the the past four months. The weekly candle broke it once and jumped back again and is currently consolidating between 1.0250 and 1.0420. The monthly charts says a re-test of 1.0650 is a possibility, but the weekly candle needs to break out of either 1.0250 and 1.04200 for us to know the direction.
You will have noticed some red and yellow triangles on the half-year charts. The triangles are lines in the sand. This is another tools that can greatly improve your success. The line in the sand is the point the big players are protecting. In simple term it is expected to serve as a temporary halt to either a bullish or bearish run. It usually take major trends to break this lines. A pin outside these lines are false breakouts.
How do you draw a line the sand?
Pick the last weekly candle of any pair after a run of at least (1000 pips...
Ignored
Articulate in your second paragraph where you say draw a triangle on the pin of the last weekly candle.
Should that have been a rectangle or line on the pin of the last weekly candle.
As I have mentioned before, the Masterchart for AUDUSD is 1500 pips divided into two equal parts of 750 pips each i.e. 0.9500, 1.0250, 1.1000. If you look at the monthly chart 1.0250 has been holding for the the past four months. The weekly candle broke it once and jumped back again and is currently consolidating between 1.0250 and 1.0420. The monthly charts says a re-test of 1.0650 is a possibility, but the weekly candle needs to break out of either 1.0250 and 1.04200 for us to know the direction.
Articulate in your second paragraph where you say draw a triangle on the pin of the last weekly candle.
Should that have been a rectangle or line on the pin of the last weekly candle.
What I will discuss here 00 PPAA & 200 PPAA within the Masterchart. 100 PPAA & 200 PPAA are the analyses price action within the Masterchart levels using 100 pips and 200 pips price movement respectively. Here is exactly what to do:
100 PPAA - Medium/Long Term Traders
1. Divide your Masterchart into 10 equal parts of 100 pips each
2. Your trading range 1000 pips
3. Use the 100 PPAA to determine your Risk/Reward Ratio which is 9:1. What this means is that you look for buy/sell after in the last 100
pips of 1000 pips price movement, which is your entry zone.
4.To enter a trade you search for pins of the weekly candles within this zone or a weekly reversal candle (reversal candle is the first weekly
bearish or bullish candle after about 900-1000 pips price movement).
5. Most of the time price completes 500 pips moves before any significant retrace. The first 500 pips is what you should concentrate on.
6. With Risk/Reward ratio of 9:1 you put your SL for sell within the next buy zone (after 1000 pips) and your SL for buy within the next sell
zone (after 1000 pips) provided this is within 2% of your trading account.
1. Divide your Masterchart into 5 equal parts of 200 pips each 2. For Day traders you will trade in the direction of the weekly candle at the break of every 200 pips. Your trading range is 200 pips and pick whatever pips you are able to within this range using H4 candles as a guide. If the trend is strong on H4 candles you can allow your profit to run if you are able to monitor the trade 3. Most of the time price completes 500 pips move before any significant retrace. The first 500 pips is what you should concentrate on. 4. For your stop loss keep it at any ratio you are comfortable with but not more that 2% of your account.
200 PPAA - Medium/Long Term Traders
1. Divide your Masterchart into 5 equal parts of 200 pips each 2. Your trading range 1000 pips 3. Use the 200 PPAA to determine your Risk/Reward Ratio which is 4:1. What this means is that you look for buy/sell after in the last 200 pips of 1000 pips price movement, which is your entry zone. 4.To enter a trade you search for pins of the weekly candles within this zone or a weekly reversal candle (reversal candle is the first weekly bearish or bullish candle after about 800-1000 pips price movement). 5. Most of the time price completes 500 pips moves before any significant retrace. The first 500 pips is what you should concentrate on. 6. With Risk/Reward ratio of 4:1 you put your SL for sell within the next buy zone (after 1000 pips) and your SL for buy within the next sell zone (after 1000 pips) provided this is within 2% of your trading account.
What is the difference between 100 PPAA and 200 PPAA? For 100 PPAA your risk is lower but you will have fewer trading opportunities. For 200 PPPA, your risk is higher, but you will have more trading opportunities. I used GBPUSD as an example of this analysis. You can pick the charts for other major pairs and prepare simiilar charts. Remember for GBPJPY the cycle is 1300-1500 pips and AUDUSD the cycle is 1500 divided into 750 pips each.
Yes! The weekly candles is consolidating and it has to break out of the zone (concrete zone) for us to know where it is heading. If you are a short-term trade, you don't have to wait for the direction before you trade. Search for my post on how to trade the concrete zone.
