Billytt Die happy trading e/j daily breakout

M-candles ( i think it was here http://www.forexfactory.com/showthread.php?p=7611376



1440 setting for day candle... i do not trade with it, but look like fun... Will staff thread with indicators, while Billy is away




P.S. My candles will be a bit different here

I'll try to give you a perspective of thinking like a trader, which is what you must do if you want to be successful & you don't or can't follow a successful trader religiously.

Just remember it's just my way of thinking, not anyone else's here. Also, I'm OCD, bipolar, & mildly autistic, so I don't see things the same way as other people, which means this may be an exercise in futility for you! But I hope not!

First chart: Hard to read for me because of the Bollinger bands, which apparently work for John Bollinger, even though he admits that they have no statistical significance (not enough data ;^) To me they look like a of plate of spaghetti someone threw at a wall. (Sorry Bunny! ;^)

Otherwise, what I see is a very common pattern, 1) similar dynamics to an important news release, a gap up, followed by a choppy diminishing consolidation. If you look back through the charts you'll see a lot of similar patterns, with big moves up & oscillating moves that diminish is size.

You might also notice that just before the big move, price is pushed in the opposite direction, which can be a tell.

This chart is almost a poster child for trading pivot points. Thinking like a trader, why are the pivots so accurate on this timeframe on Sunday/Monday?

I mean look at this: gap => R1 reverse => pivot reverse => next day's R1 reverse => next day's pivot (used as both support & resistance) reverse => R1 reverse => S1 reverse => classical correction about 1/2 way through the move => S2 (used as both support & resistance)

All you need to trade this chart is pivot points (& the confidence to trade them). Getting the confidence is a matter of statistical analysis, experience (you have to put the time in trying to figure out the right way to trade your results & protect your capital ;^) & practice, practice, practice.

For example, you could look through the charts (on MT4 Home will put you at the beginning & End will move to the current prices) & find other days that pivots worked similarly. Look at the days of the week, what was driving the market, whether it was trending or in consolidation, etc.

Next you could look at the days that failed even though most factors were the same, & see if you would be able to work your way out of a losing trade, by taking the other side, hedging, or placing another trade in the same direction if you expect a reversal.

SL's will kill you if taken too often. It's a battle not to take them unless you have broken your rules & can't work your way out of a trade.

Once you think you have a valid statistical method that you're comfortable with, use a step forward practice method (F12 on MT4) to see if you can recognize the pattern while it's forming. When you are really comfortable with that, trade a live demo account until you are profitable.

So, really, there's not much to it, it's just a lot of hard work & clear thinking. As I recall, Henry Ford was the one who said, "Thinking is the hardest work of all. That's why so few people do it."

I don't trade Sundays, & in fact the broker I use doesn't have a Sunday bar, which generally works better for algo trading. Studies show, I seem to recall, that traders that trade Sundays & Mondays do not have better returns than just trading the rest of the week.

But it's been a while since I saw that result, so it could have changed. And, of course, the studies did not consider just excellent traders like the crew here, who can trade things others cannot. If you lack a lot of experience, you may not be able to get the results that other traders here get.

There is a simpler method if you can trust other trader's results. The traders in this thread provide good examples of methods that you might be able to trust.

Trade their method religiously. Don't try to change it unless you have the experience & knowledge to make changes.

This is where a lot of traders make a mistake. All the traders here on this thread know what they're doing, & are kind & generous enough to share their methods. Ask yourself why you need to change it, & if you have a valid reason, change it as little as possible & test your changes to see if you've killed the goose that laid the golden egg.

So, to trade this chart:
>I would first check the news at FF, marctomarket is my favorite, & eFX is good for what the banks & central banks think,
>then check the trend on the MN, W1, D1, H4, H1, & M30 charts, just to see the forest not the trees,
>then put on the pivots (I trade a similar but different metric).
>If I'm expecting a gap, I would look at all the weekend gaps to see how many closed the gap, & if I could get out of the ones that didn't at BE, or BE + 2-5 pips. This will tell me if my edge is big enough for my comfort level, & the size of the position I need to put on.

This all has to be done before the Sunday open, of course. I'm a counter trend trader mostly, so that first bar would be tempting since the gap is often closed, & it's a large bar which extends above the R1 level.

My thinking here is, "Is it going to go up enough to hurt me before it drops?" Since it gapped up & not much is happening on Sunday, I would look for those traders that made money on the gap to reverse their positions to protect their profits, which is apparently what may have happened.

You might also note that the third & fourth bars before the gap were down bars as mentioned earlier. As I said, this can be a tell that also often repeats just before a big news release.

As for the bar that you have marked with an arrow, it's just one of many that move from pivot point to pivot point on this chart.

True it is a pin bar which might make it appear to be a reversal bar, but we don't see the whole pin bar until it closes. I trade at or just after the open & all my indicators are based on the open, so all are available at the open with only the bar missing.

I would have closed half of my position at the pivot, held the rest until price returned to the pivot & reversed my position when it continued higher. But that takes a bit of practice to get it right. But practice is what makes a trader.

Good luck! May your journey be a pleasant one!

Second chart: I personally would not generally trade a chart with this kind of jerky PA on this time frame. I would look at higher time frames, H1 or H4, which will tend to smooth the movement by consolidating each 4 to 16 bars into one.

All highs & lows are the same on all time frames, of course. I just prefer smoother price action in general to be comfortable.

If I were to try to trade this I would follow Billy's method religiously, since I think he likes this pair, or was it Claudia? No, I think she pretty much likes cable.

Third chart: A nice chart for counter trend trading. If you look at the size of the bars from high to low, the large bars stand out better. You also can see the overlap between two adjacent bars that would allow an exit if it moves against your position.

Notice except for the five red bars in a row, called a breakaway by a long ago futures trader, there are no more than three bars in a row before a reversal of some kind that would allow you to get to break even. Reversal points are pretty much as previously explained.

Fourth chart: Interesting looking at this chart because it's really different from the M5 charts from my broker.

The close & the open of the next bar should be put in simultaneously. If they are different, there is slippage, which is rarely seen on my platform unless it's a fast market. There seems to be a lot on this chart.

If by a double top, you mean the green bar followed by a red bar, of course they would be the same level since the close of the green bar should be put in simultaneously with the open of the red bar. In fact every two adjacent bars of different colors should have a close followed by an open at the same level unless there is slippage.

Aside from that, your first entry at about 08:00 was a good one, but not my way of trading. If I had gone long near the bottom of that bar, I could still have gotten to break even on the next two bars. Though you would have been right this time, a time will come when it will go the other way. Always good to see if you can get out if it moves against you.

Fifth chart: A very easy chart to counter trend trade. About the bars you have marked A & B, notice that R2 was broken earlier then price drifted down until A tapped S2, which could offer support. I would have been comfortable putting on a long as the bar came near S2. If it bounced I'd have made some pips, & if it continued down there would likely be enough overlap to get to break even or more.

The same goes for B which is retesting R2. See how much further it sticks up above the previous bars. It looks like a reversal bar to me, so I would have tried to short it as near to R2 as possible. If it reverses, I make pips, if it moves against me I expect enough overlap to get out at BE or more.

Just my way of trading, not for everyone, of course. Tops & bottoms have always appealed to me (no wise cracks please ;^), even though there is the old caveat: never try to call tops or bottoms, which may apply to certain situations. We traded tops & bottoms when I traded at a prop shop, & it's a technique used by hedge funds as well, where reversals are put on after a certain number of standard deviations from the mean.

I would advise never trade tops or bottoms if you are guessing. But if your are guessing, you are gambling. No matter how good you are at guessing, a time will come when you'll guess wrong & it will be when you have a sizable trade on. Go with money management & the statistical edge & you can always recover.

Hope some of this helps. Now that I've explained my style of trading, I'll not post any more excessively long entries. I promise!

Best wishes to all for profitable trades!

Thank you for the kind words, as always, Claudia. I can't imagine you needing to figure out how anyone else trades since you are quite a master yourself!

We are lucky to have bunny for a broader perspective, as I think she adds a lot of variety, but I can only trade my way. She has an impressive site!

Thanks, bunny, for this indi. I've been looking for something like this for a long time, since it eliminates needing two charts to compare PA on two TF's.
On the site you referenced above, there are two uncompiled versions also which can be modified.

Shows last bar as it's forming.

Doesn't show last bar until it closes.

http://www.dailymail.co.uk/news/arti...eet-chaos.html

Thanks Ever.
I am working through your post. Your input and time is much appreciated and has been printed out for future referencing.
This is a great thread with lots of practical advice from Claudia, Billy, yourself and others.

Thanks E. Man. The purpose is to make right soup from all good ingredients . .... Some ingredients for trend trading, some for consolidations .

Some trade ideas - comments welcome- not much for me so far today:
@Claudia1
I couldn't see an hourly Pivot chart on GBG/USD or upload one. IG seems to be playing up ?

Some charts I could upload..:

IG had major problems this morning don't know why. Just sold e/u back to pivot. Back later.

@Claudia11
IG seems to be working now !
GBP chart but no trade taken. Interested in your comments on suggested trade areas I have shown.

2am Pivot was broken Long but like all good boys I was in bed.

Sorry to be a pest but why did you short back to the Pivot. Was it nearby resistance ?
Thanks

@Ever E. Man

This section caught my attention (it's all good by the way, and printed off).
For example, you could look through the charts (on MT4 Home will put you at the beginning & End will move to the current prices) & find other days that pivots worked similarly. Look at the days of the week, what was driving the market, whether it was trending or in consolidation, etc.

Next you could look at the days that failed even though most factors were the same, & see if you would be able to work your way out of a losing trade, by taking the other side, hedging, or placing another trade in the same direction if you expect a reversal.
A trader takes a position in one direction which then seems to go against him. he works his way out by taking the other side - maybe on a lower time frame ?
Thanks for taking the time to write so much useful advice. Much appreciated.

Couldn't trade IG earlier was impossible. Managed a nice trade on e/u off 15 min looking retrace to pivot. Trade areas on your charts look fine by me.

You only lack one thing and is confidence I think.

Have you been talking to my wife

You are correct though. I am a timid trader.

be brave!

@ Bunny - getting ready to short this. Got $ strength for sure but must pull back. Thoughts? Please don't tell me it's at 10 year pivot What's happened to William ?

May bounce off 119.800 (Resistance) for a short ?

And...

My Brent Crude, as the stage direction might say, "Later that day."

That's where I'm looking at basically a bounce of today's high. Edit: or maybe not funny day

Yes, it's a good approach.

I'm a simple person, so I have to use a simple approach, & narrow down my goals to: where do I get in & where do I get out.

Biggest driver for me: Can I get to break even! (Aaah! home free! ;^)

I respect & admire your approach, although I couldn't do it myself. (My brain couldn't take the complexity! Maybe my age.)

A wonderful thing about this thread is the variety of workable trading methods without all the "my way is better" wannabe chatter.

A thread full of mature traders! Who would of thunk it?