When Price is UP, buy; when Price is Down, sell short...

Yes Sajid,
which pair are u looking at ?

Hi Sunshine,can you analyse euraud,which other sma do u use with 50sma and what is the meaning of blw d50sma * month - sell updays,also can you summarise this strategy again.thanks

Hi Sunshine, for now still trading the weekly/4hr combo,at what point do i desist from following the last week candle,look at my highlighted example,or you moved to monthly-day bcos others are not effective?

hi duderoo

welcome back and please don't be so quiet, i value your input.

ok, lets do the Loonie pairs. USDCAD+GBPCAD+EURCAD

i found that when price drops to below the 50b sma & 30b ema it tends to form a consolidation or a sideways range that lasts from 1 month to a week, i am referring to the Daily charts. So i marked out those sideways movements with a box on the Dly charts. {i'm thinking about Nicolas Darvas now}

the trading direction for the coming week, favours shorts on all 3 charts.
the odd one out is the middle chart, GBPCAD. you will notice that this pair broke its Dly Down trend by closing above its LSH, but then there was no follow-through and a very bearish bar formed, signalling downtrend continuation. So should i enter a trade here on monday then i would place a SL above that bearish bar. if monday does not follow-thru with a down bar then it will signal to me to go long.

PLEASE NOTE:

1. every time a bar forms a new low (compared to the bar preceding it) and close UP, alarms bells should go off and a buy probe can be activated (see the arrows on the charts...green arrows indicate signal is in line with higher tf...white arrows indicate signal is confined to the Dly chart and is temporary or of a short term nature.)
2. NOW, if that same bar closes above its LSH then it broadcast to me its intention to move up.
3. and if this chart pattern agrees with the higher tf combination, such as in M+Dly, then it i added weight. {some may call it a filter.}
4. FAILURE of a Reliable price pattern permits trades in the opposite direction.

hi Sunshine,have the pics.

a closer look at GBPCAD.
this time the CADJPY is included.

hi timilehin
did u take any short trades on that pair that u posted a 4hr chart of ? the EURAUD ?
i remember u confirming with me about its higher tf directions on in the beginning of the week.

Hi Sunshine, needed a clarity,u can see on d vertical lined monthly candle of gbpcad was up,and d next month was down,how does one treat such,moreso on lower tf it might be commom

hi Sunshine,i took short trades,my issue is at some retracement Up,backed out

no, i moved to the Daily because i can not find the time to check every 4hrs and i find i am not under pressure to consult the charts every hours just to see how price closed. i still prefer the 4hrs but find the switch to Dly more relaxing and it suits me better.
sometimes when i want to enter a trade i check the Dly a few hours before its actual close because i may be asleep when it actually prints a new day, then i will flip to the 4hrs to see if it agrees with my intented trade direction...if it does then i just enter the trade without battling to staying awake.

if i traded the 4hrs then i would have made a big gains on the CADJPY this past week, instead if a loss, but there is an additional reason why i made a loss on the CADJPY pair, and that i mentioned in a posting earlier in the week, is that i ignored the fact that price closed above its Dly LSH...see the chart i just posted.

...so i would recommend to trade the 4hrs if u definitely can find the time to check-in every 4hrs.

to answer your Question; if the Weekly+4hr combo is down, then u will continue to short off signals in the 4hrs until one of two things happen..

1. should an Up bar forms in the WEEKLY then u shall stop shorting, and look for buys next week, do u understand this ?
2. if the 4hrs close above its LSH then u will also stop shorting. take profit on the other shorts and u now have the option of going long.. understand ?

ok. i understand.

this means u should not be trading live yet...!!!

u do not have the confidence in the method yet, so i advise u to move to demo trading this method and strategy until u understand it fully.... please.

excellent question...!!!

u will catch this reversal in the lower timeframe only...so the Monthly reversal will show up in the Dly...
how or what signal will tell us that ???

1. M+D goes together, so if the previous month closed up we will naturally be looking for buys in the Dly, correct ?
2. we will keep on entering longs UNTIL the Daily close BELOW its own LSL, from this point onwards
3. we will close our buys and
4. shall take Daily reversal short signals...please make sure u understand this switch.

Hi Sunshine, can you see the false buy ENTRY,but the short still continued,how can this be filtered or u adviced its the right point to leave market and what sma do u use with 50

if u follow all the signals of this strategy then this LSH buy signal cannot be avoided...make peace with it and accept it then move on. false signals are impossible to eliminate.
this EURAUD 4hr LSH buy signal is similar to the GBPCAD Dly LSH buy signal of post 747 above, even the last bearish bar formed a NewHigh then closed Down, just as in your 4hr example of the EURAUD.

See the same 4hr chart that u posted below... the LSH in purple permits a buy, but this buy trade will result in a loss, accept it and move on the next signal which is the NH that closed down...a shorting signal in a down trend is like free money...but if u were still upset about that buy loss then u will never see this short scream.
...the arrows on the charts points out additional NewHighs that closed down bars in a DOWN TREND, W+4hrs=Down. take them, it's like free money.

PS: the moving averages are 30b ema & 50b sma...but don't stress over them...they are only guides...first make sure u understand the basics of this method and strategy thoroughly.

EDIT: in post 745 above to duderoo, i posted charts...please take a look at all the bars that the arrows point to...price made a new high then closed down OR price made a new low then closed Up. study what happened afterwards please.

for those traders that asked for an explain and summary of this Trend Following Method together with its strategies, i present a pictorial summary and explanation through the following charts of GBPJPY.
i will give the words first followed by the pictures. i will use the Monthly as an example but apply the same steps should u wish to trade the Weekly+4hr combination.
more information are on the Daily charts.

Monthly Chart: when scouting for trades and trading opportunities then please start with a Line Chart. we will do the Geppy as an example.

1. check last monthly candle...how did it close ? Up or Down ? ...this answer determines our Trading Bias in the lower timeframe for the new month. the lower tf is the Daily chart.
2. added confirmation...did price close above a LSH or below a LSL ? ...this answer indicates a Trend Change of the higher timeframe.
3. mark off the LSH & LSL ...i use green to indicate monthly (and red and orange for weekly, white for Dly & purple for 4hrs)

​

Attached Image

Daily Chart: same procedure here as in monthly, we start with a Line Chart first.

1. check Daily chart in line format.
2. mark-off the LSH or the LSL. in this case the line chart of the GBPJPY.
3. on the 6th trading day of February the LSL of January was broken ►signaling shorts rule and
4. on the 1st trading day of March the LSH of February was broken ► indicating buys are in order.
5. that's it !!! very simple.
6. u may:: {1}close all your shorts {2}or keep your shorts {3}and trade long {4}until another ["free-money"] reversal bar then close all longs and {3}initiate a new short.
7. the highlighted green arrows are the "free-money" or "fm" signals.fm signals can be found in (i) a downtrend and (ii) in an uptrend.

​Definition of an fm signal:

1. Downtrend... price makes a New High then close down/red...designated as: -fm
2. Uptrend...price makes a New Low then close up/green...shown as: +fm
3. now !!! if a +fm signal appears in a downtrend, its called a "fart mode"
4. same when a -fm signal appears in an uptrend ! ​

please see the various charts below. i really hope to clear up any confusion and fuzziness.

after the Line chart of Daily we will then switch to candle or bar charts to see the actual completed days/bars.

Hi Sunshine.
This is a great thread.
Regards
Kev

Hi Sunshine

Last week on the Eur/usd the weekly candle is a bull candle does this mean that we look for longs in the 4 hourly.

Regards
Kev

hello kevin

thank u for your kind words. i do hope u find memorable value here.

please check my next posting to u.