Hey fellow ForexFactory traders, Raghee here.
I receive a lot of questions about how I use my tools: The 34EMA Wave and GRaB Candles on a daily basis. It's time to get the discussion going and get the record straight, so to speak. Those of you who know me, know that I have been active here at ForexFactory.com for a long time, sharing my analysis and set ups...and much of the reason for the popularity for my tools is there simplicity but there are some basics to make sure that you're using the tools correctly or at least the way I intended when I first started publicly sharing the "Wave" back in 1997 when I started trading e-mini S&P futures.
After years of trading the Wave in the equities and futures markets, it seemed natural to apply it to the forex markets when I added it to my overall trading in late 1999/early 2000. Some of you may already know my background, but the short version is that I am a self-taught trader. I started in high school, drawing all my charts by hand, calculating all my indicators myself. While learning in a bubble with minimal outside influence, I was not swayed - and am still not - by the dogma of trading. I continue to focus on what works for me, am not concerned about "how it's always been done", and live in a "results economy" meaning - like you - I want to focus on what I understand, what I can use with consistency, and being as objective as possible.
I know what I know, I use what I use, and I trust what I trust. Whatever you do in trading and in life, I wish the same for you.
There is no "one way" in trading. I am here to share what's worked for me mainly because there is some confusion and misapplication of my tools. Please be courteous to one another, we're all simply here to learn and share and after all ...rudeness is a weak person's imitation of strength.
So here are some basics, and while you can do whatever you want with these exponential moving averages, I want to share how I have used the
- 34 period exponential moving average on the high
- 34 period exponential moving average on the close
- 34 period exponential moving average on the low
First is putting these moving averages lines in the "proper context". I wrote about this in my first book "Forex Trading for Maximum Profit" back in 2007. I call it market memory or "loopback". In other words each time frame has a consistent view on my platform.
For the weekly it is five years
For the daily it is one year
For the 240-minute chart it is 3 to 6-months (min. 1 month)
For the 60-minute chart it is 1 to 3-months (min. 2 weeks)
For the 30-minute chart it is 2 to 4 weeks (min. 1 week, 4 weeks is a max.)
For the 15-minute chart it is 1 to 2 weeks (min. 1 week)
For the 5-minute chart it is 2 to 5 days (min. 2 days)
Now these are slightly longer that the "lookback" settings I talked about in my first published book in 2007, but not by much. Think of them as the minimum amount of data that you should start your analysis with and in this view pay particularly close attention to
- the "clock angle" of the 34EMA Wave (used to determine the market trend)
- high and low
- the dominant trends that occurred
- gaps (if applicable)
- last major moves (larger trends) for Fibonacci Retracement
- trendlines, support, and resistance
In other words most chart observations that I would use for a potential trade are done in the "lookback"...focusing on what I find is the most relevant data for that time frame.
GRaB Candles are an extension of my 34EMA Wave and are simply a visual tool. I use them to determine the momentum and organization of a market trend. They are also a nice tool to use for traders looking at multiple charts and screens. They make my charts "glance-able" - in other words - I can make a some important decisions about price action on a specific time frame quickly "at a glance". Typically an uptrend will have almost all green GRaB candles, a downtrend will have almost all red GRaB candles, and the more blue GRaB candles that I see, the higher the likelihood that the trend is correcting and/or in transition or that the market is trend is sideways (accumulation or distribution).
Since each entry strategy I use is specific to a market trend (e.g. trend following in only green or red GRaB candle dominated time frames) it is especially important that I use these guidelines that I have explained here.
"Don't write for everybody. Write for yourself and hope there's readers out there like you. It's the best way to keep your writing true."
I receive a lot of questions about how I use my tools: The 34EMA Wave and GRaB Candles on a daily basis. It's time to get the discussion going and get the record straight, so to speak. Those of you who know me, know that I have been active here at ForexFactory.com for a long time, sharing my analysis and set ups...and much of the reason for the popularity for my tools is there simplicity but there are some basics to make sure that you're using the tools correctly or at least the way I intended when I first started publicly sharing the "Wave" back in 1997 when I started trading e-mini S&P futures.
After years of trading the Wave in the equities and futures markets, it seemed natural to apply it to the forex markets when I added it to my overall trading in late 1999/early 2000. Some of you may already know my background, but the short version is that I am a self-taught trader. I started in high school, drawing all my charts by hand, calculating all my indicators myself. While learning in a bubble with minimal outside influence, I was not swayed - and am still not - by the dogma of trading. I continue to focus on what works for me, am not concerned about "how it's always been done", and live in a "results economy" meaning - like you - I want to focus on what I understand, what I can use with consistency, and being as objective as possible.
I know what I know, I use what I use, and I trust what I trust. Whatever you do in trading and in life, I wish the same for you.
There is no "one way" in trading. I am here to share what's worked for me mainly because there is some confusion and misapplication of my tools. Please be courteous to one another, we're all simply here to learn and share and after all ...rudeness is a weak person's imitation of strength.
So here are some basics, and while you can do whatever you want with these exponential moving averages, I want to share how I have used the
- 34 period exponential moving average on the high
- 34 period exponential moving average on the close
- 34 period exponential moving average on the low
First is putting these moving averages lines in the "proper context". I wrote about this in my first book "Forex Trading for Maximum Profit" back in 2007. I call it market memory or "loopback". In other words each time frame has a consistent view on my platform.
For the weekly it is five years
For the daily it is one year
For the 240-minute chart it is 3 to 6-months (min. 1 month)
For the 60-minute chart it is 1 to 3-months (min. 2 weeks)
For the 30-minute chart it is 2 to 4 weeks (min. 1 week, 4 weeks is a max.)
For the 15-minute chart it is 1 to 2 weeks (min. 1 week)
For the 5-minute chart it is 2 to 5 days (min. 2 days)
Now these are slightly longer that the "lookback" settings I talked about in my first published book in 2007, but not by much. Think of them as the minimum amount of data that you should start your analysis with and in this view pay particularly close attention to
- the "clock angle" of the 34EMA Wave (used to determine the market trend)
- high and low
- the dominant trends that occurred
- gaps (if applicable)
- last major moves (larger trends) for Fibonacci Retracement
- trendlines, support, and resistance
In other words most chart observations that I would use for a potential trade are done in the "lookback"...focusing on what I find is the most relevant data for that time frame.
GRaB Candles are an extension of my 34EMA Wave and are simply a visual tool. I use them to determine the momentum and organization of a market trend. They are also a nice tool to use for traders looking at multiple charts and screens. They make my charts "glance-able" - in other words - I can make a some important decisions about price action on a specific time frame quickly "at a glance". Typically an uptrend will have almost all green GRaB candles, a downtrend will have almost all red GRaB candles, and the more blue GRaB candles that I see, the higher the likelihood that the trend is correcting and/or in transition or that the market is trend is sideways (accumulation or distribution).
Since each entry strategy I use is specific to a market trend (e.g. trend following in only green or red GRaB candle dominated time frames) it is especially important that I use these guidelines that I have explained here.
"Don't write for everybody. Write for yourself and hope there's readers out there like you. It's the best way to keep your writing true."
