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  • #141
  • Apr 26, 2016 12:47pm Apr 26, 2016 12:47pm
Quoting cat
ps...GJ is just beneath its Daily 100sma by the way, 16,336, so watch that!
Yup, got D1 SR in the vicinity. Be nice to catch a D1 swing at some point but for now, trading the lower tf ebb and flow.

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  • #142
  • Apr 27, 2016 12:04am Apr 27, 2016 12:04am
Quoting cat
As promised, here are a few charts from the index I trade every day, which is the Dax 30 rolling daily. In the New York trading hours, I normally switch over to the Dow. I don't trade anything else, though my favourite forex pair, which I still trade from time to time, is GBP/JPY. I'm showing the entire month of April, which has been in a strong uptrend. Starting with the Daily, you can see where the 200 zero laf moving average (turquoise/pink), came underneath the price to offer support when the price came back off the 50% fib ( brown horizontal...
thanks Cat for sharing. Amongst your charts I couldn't actually see the daily chart that you refer to. Rest made sense and I will give further thought to see what I can incorporate into my trading.

Is zero lag indicator common? (I couldn't see it available from my broker for instance)
Hope for the best, prepare for the worst.
  • #143
  • Apr 27, 2016 1:20am Apr 27, 2016 1:20am
Quoting dab
{quote} thanks Cat for sharing. Amongst your charts I couldn't actually see the daily chart that you refer to. Rest made sense and I will give further thought to see what I can incorporate into my trading. Is zero lag indicator common? (I couldn't see it available from my broker for instance)
Yes I know dab, sorry about that, for some reason it didn't post, so here it is again. If your broker doesn't offer the ZL, then the best you can do is play around with the MAs you've got and fins something that is similar. Not sure how many people use the ZL, but you'll find it's a personal thing, as traders all have their pet MAs, this is just one of mine.
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  • #144
  • Apr 27, 2016 1:38am Apr 27, 2016 1:38am
Quoting cat
{quote} Yes I know dab, sorry about that, for some reason it didn't post, so here it is again. If your broker doesn't offer the ZL, then the best you can do is play around with the MAs you've got and fins something that is similar. Not sure how many people use the ZL, but you'll find it's a personal thing, as traders all have their pet MAs, this is just one of mine. {image}
Thanks!
Hope for the best, prepare for the worst.
  • #145
  • Edited 3:20am Apr 27, 2016 2:30am | Edited 3:20am
Quoting cat
{quote} Trading is of course much more complex than merely waiting for a pullback and jumping in with the trend, you have to know that it is a continuation and not a top or a bottom for example, but getting into the habit of trading with momentum instead of against it, like surfing a wave instead of trying to paddle through it, is the most effective way I know of making consistent money in this business.
Thats the million dollar question !

I'm glad that you started a new thread on a topic that I have been struggling with the past couple of months.
You don't have to answer my pm if you've already (going to) discussed this. I'm following your thread.

No nonsense here please ! Cat knows what he's talking about.

Its funny how we tend to overlook certain things such as this for instance.
I bet you would have gone long right on the triangle pullback. Its clear as sky on 1m chart and beyond 5m. But I was glued to 30 sec chart. Prior to Frankfurt open price had been going up non stop, no correction. So I decided to catch the top thinking correction was due instead of going long on the pullback. How do I avoid this manner of thinking ?

Onto the last chart where would you short ?
We're calling a top now. No divergence yet on 30 sec chart but in my overly logical head I'm still thinking we're due for some correction now. What do you think ?
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  • #146
  • Apr 27, 2016 2:58am Apr 27, 2016 2:58am
Quoting cat
Hundreds of books have been dedicated to this question, hundreds more threads have discussed it and analyzed it, everybody knows what it is, and yet, the majority of traders still lose. The answer boils down to just one thing around which everything else will, given time, fall into place. The reason we lose is that we ignore it, and we ignore it because it runs counter to human nature, for we humans are especially prone to over-complicating things and failing to see the wood for the trees. Such an approach to the markets is usually fatal. As Einstein...
The "holy grail" does exist but it is not what everybody searches for. I believe the "holy grail" is a thorough understanding of the daily chart (& higher TFs), position sizing, risk: reward ratio, discipline/patience, amongst other important things and NOT the $100 to $1million so many look for in initial phase, myself included. I will start my own threads when I get the chance to share my views.
  • #147
  • Apr 27, 2016 3:15am Apr 27, 2016 3:15am
Quoting Piquant
{quote} Thats the million dollar question ! I'm glad that you started a new thread on a topic that I have been struggling with the past couple of months. You don't have to answer my pm if you've already (going to) discussed this. I'm following your thread. No nonsense here please ! Cat knows what he's talking about.


Some of the time
  • #148
  • Apr 27, 2016 3:37am Apr 27, 2016 3:37am
Quick note on time frames from my own perspective. I'm a strong advocate for keeping things as simple as possible, but I do like to have several time frames open. I've discussed this above and elsewhere, but just to reiterate, I have an hourly open all the time, and check H4 and H2 from time to time. I then have a 30m, but also keep an eye on the 45 m. Then it's a 15m, 10m, then all the way down to 2, as the 10m contains everything I would need to know from the 5m. Then it's 30 sec, and the smallest 10 sec for getting the best entry that I can. Using this multi-time frame approach is very important for my trading as it gives me all of the potential S&R levels for the day, and it gives me the main directional momentum. So for example, this morning on the Dax, the 200ema ( the most important moving average in my arsenal ) is above the price on the 10m, 15, 30m, but is a support level on the H1. What the London boys love to do at the open is move the price aggressively in a counter trend move, taking it to a level where they can pile in with the trend/momentum ( I prefer to call it momentum, as trend makes it sound too fixed )They did this this morning, buying it to the 15m/30m 200ema, to the pip. They then sold it hard back down to the H1 200ema, bought it back up again, and sold it down again, so far to the same level. It has been a very predictable morning for the Dax. This is why I only trade 2 markets, the Dax and the Dow. It takes a considerable amount of time to really get to know a single fx pair or indecis, for although one good strategy will work on most markets, they do all however have their own personality, and the more a trader familiarizes himself/herself with it, the more effectively they will be able to trade it. I know many traders trade multiple fx pairs and/or markets, but personally, I see no point in this, as a pair like GBP/JPY, or the Dax for example, have more than enough moves in any one day to make/or lose, a fortune.
  • #149
  • Apr 27, 2016 4:13am Apr 27, 2016 4:13am
Quoting cat
What the London boys love to do at the open is move the price aggressively in a counter trend move
Bread and butter tactic of the boys.

One can build a good trading strategy on just these moves (1m/5m chart) and only work for 2-3 hours a day.

Doesn't always work of course but then nothing works all the time in this game.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #150
  • Apr 27, 2016 4:26am Apr 27, 2016 4:26am
Quoting Calculus
{quote} Bread and butter tactic of the boys. One can build a good trading strategy on just these moves (1m/5m chart) and only work for 2-3 hours a day. Doesn't always work of course but then nothing works all the time in this game.
No it doesn't, but if the big price movements around the London open are studied enough, a pattern can be recognized so that, using a small stop loss, you can find yourself significantly ahead of the game because the moves are often so fast and the pip haulage high. Yes, I also believe that if one studied and concentrated on this time of day, then it would be possible to work just 2-3 hours a day and make a very good living from it indeed. Remember, the markets usually go quiet around 10.30-11am London time, as most of the work in the big exchanges has been done by then and the boys need their coffee. It comes alive again at the New York open. As a full-time trader, I use the market's quiet times just to take a break, go for a walk, rest my eyes, and analyze my morning's trades. However, the charts do dictate, so I'll be close to my desk if I need to be. Rest though, is very very important, and I use every opportunity I get during the day.
  • #151
  • Apr 27, 2016 4:43am Apr 27, 2016 4:43am
Quoting cat
{quote} Rest though, is very very important, and I use every opportunity I get during the day.
And Sleep Cat, sleep is an edge in my book. Can't remember the last time I didn't get 8 hours. The downside to getting 8 hours is you've got to be in bed early, like 9pm because in the UK it's a 6.30am start.

And you're 100% right, you've got to study those early morning moves, they can be tricky and very fast but there's Gold in them.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #152
  • Apr 27, 2016 4:50am Apr 27, 2016 4:50am
Quoting Calculus
{quote} And Sleep Cat, sleep is an edge in my book. Can't remember the last time I didn't get 8 hours. The downside to getting 8 hours is you've got to be in bed early, like 9pm because in the UK it's a 6.30am start. And you're 100% right, you've got to study those early morning moves, they can be tricky and very fast but there's Gold in them.


  • #153
  • Apr 27, 2016 4:51am Apr 27, 2016 4:51am
It's good practice on a pair like GJ to study M1/M5 because it gives in a pretty short space of time a nice live version of what price does, where and why.

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  • #154
  • Apr 27, 2016 4:56am Apr 27, 2016 4:56am
Exercise, also very important, as is the right food. Healthy body - healthy mind!
  • #155
  • Apr 27, 2016 5:33am Apr 27, 2016 5:33am
Quoting cat
Exercise, also very important, as is the right food. Healthy body - healthy mind!
Positive. Also "Faith" is very important factor in this battle.
Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -629
  • #156
  • Edited 5:46am Apr 27, 2016 5:36am | Edited 5:46am
If one really simple method were to be put into words, I suppose it would be:

1. Identify on the chart where price has turned. The optimum place for this is typically at the end of a down-move for potential longs, or an up move for potential shorts. Today, the turning point was the lower thicker yellow line, which was drawn at the lower high and subsequently inverted by those green momentum candles.

2. Wait for pullbacks.

3. Trade (RR and position size according to your own account profile and trade plan) the price-action that supports the direction of the move anticipated - in this case, bullish price-action.

4. Trail the market/have an exit price. (I'm currently working on doing both)

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Edit: what I'd say here is that this method goes back to cat's original statement, which is to trade with the trend/move/direction; whatever we want to call it. But if we're buying, buy with the market. Anything else will get us fried.
  • #157
  • Apr 27, 2016 9:15am Apr 27, 2016 9:15am
This thread is essentially all about trading with momentum, which is actually not the same as trading with the trend, it just means that you are not about to enter a trade which is about to run against you. If it doesn't, and it runs for you soon after your entry, you have correctly opened a trade in which the majority of active traders trading the same market have also recognized as an opportunity, ie, you are trading with them and not against them. this, if there is a secret to trading success, is it. If you can recognize exactly where the price is likely to move away and act upon it, you are there. All that remains for you to do is execute the order. Sounds simple doesn't it? Well, it isn't of course as we all know, but this is what we are all striving for.

I have a lovely little 40 pip momentum change trade to show you from this morning's Dax. It is not a trend trade, and it is not a counter trade, it is a trade when the previous down move from the London open had come to an end, and the chart had positioned itself for a move the other way.

I'll take you through it as quickly as I can.

For those who read my previous posts on this thread, you'll know that the light blue/pink moving average is the 200 zero lag. When that got beneath the price, for me the down move was over.

There are actually several places you can enter this buy trade. The first is on the little yellow arrow, and I would enter here, especially if I've just got a nice winning trade behind me, because the zero lag and the 20ema have met - this is a bullish signal. as you can see, with a 12 pip SL here, you'd be fine provided you don't mind the price coming back at you a bit as it is almost guaranteed to do as it was still well beneath the 100sma and even further beneath the 200ema. So back it came, but as you see, it was held by the zero lag, which is a beautifully powerful little MA when it gets beneath like this.

In this situation, the price will almost always test the 200ema before coming back, and you have to anticipate this ( trading is all about anticipation, being one step ahead of the market, it's the only way you can get ahead ) Now look at where it finds support again - my zero lag. Now this little area of sideways chop inside the box is like the death rattle for any bears left, because this is a sure sign that the price is about to break out to the North. Enter in this box with your SL well clear of the Bollinger band, and you have a pretty sure thing trade on your hands - no joke.

A word about my MACD. I'm looking for a MACD that has been rising up from well below zero, and this one is pretty much perfect. Combine this with your 30 second or 1m Macd, which should also be south of the zero line, and you're set. By the way , on the smaller charts, the 10 and 30 second ones, I change the MACD setting from the standard 12 26 9, to 65, 100, 15. This is because for these small TFs, the standard setting is just mad to look at and you can't really get anything from it. By widening the periods, it smoothes it out nicely. this wasn't just a setting I plucked out of thin air, much trial and error went into getting it just about right for these time frames.

I don't want to get into exits, as I could do a whole new thread on those, but if you use fibonacci, you find that this trade found resistance on the 76.4%.
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  • #158
  • Apr 27, 2016 9:58am Apr 27, 2016 9:58am
Quoting cat
This thread is essentially all about trading with momentum, which is actually not the same as trading with the trend, it just means that you are not about to enter a trade which is about to run against you. If it doesn't, and it runs for you soon after your entry, you have correctly opened a trade in which the majority of active traders trading the same market have also recognized as an opportunity, ie, you are trading with them and not against them. this, if there is a secret to trading success, is it. If you can recognize exactly where the price...
Very informative entry as usual. I see that you have new addition to your arsenal 200 zero lag. I have noticed this price behaviour time and time again on a pair I trade often EURAUD. But I often find myself wondering about the perfect entry point. To me this is a bottom , it's good to know that I haven't been doing things entirely wrong. Is there anything else you look out for besides MAs that you know for sure price is headed for an upturn ? For instance certain price structure ?

From my experience in calling bottom there's a usually a phase of congestion like the chart you shared before the change occurs. But sometimes price just shoots up without prior notice after two or more legs down move.

I love your chart btw. Wish I could opt for something like this. When I make it as a pro I guess
...
  • #159
  • Apr 27, 2016 11:15am Apr 27, 2016 11:15am
Quoting Piquant
{quote} Very informative entry as usual. I see that you have new addition to your arsenal 200 zero lag. I have noticed this price behaviour time and time again on a pair I trade often EURAUD. But I often find myself wondering about the perfect entry point. To me this is a bottom , it's good to know that I haven't been doing things entirely wrong. Is there anything else you look out for besides MAs that you know for sure price is headed for an upturn ? For instance certain price structure ? From my experience in calling bottom there's a usually a...
Oh I'm always mucking about with different moving averages, so don't take this particular zero lag as anything definitve. More importantly is to recognize certain price behavior and patterns - when you've been doing this long enough intuition plays a big part - you just get to know what to look for. Candle formation is also very important, especially around the area you are preparing to trade, as a candlestick often provides the signal traders are waiting for, such as a hammer around where you'd expect one to be. All trades though are a leap into the dark. all you can do is have a set of criteria for entering a trade, which if met, you act upon without hesitation , especially when small time frames are being used for entries. If you look at the chart I posted yesterday, showing the down move and the subsequent long entry opportunity, you'll see how similar it is to the one I posted today. This is a pattern that repeats itself over and over. One more indicator I forgot to mention here is the fibonacci, which I use a lot, especially the 61.8 and 76.4 levels. The re-test off of the major MA, will very often find S or R on one of these levels. With this trade, it did not get beneath the 76.4. When it does this, putting in a series of lower stalks for further confirmation, see it only as a clear signal that support has been found, because other traders will, and they will act upon it. And this is one more thing I will stress, when you are trading, although you are alone at your desk, you are actually part of an ever-changing team. If you are part of the team that is about to buy the price, you will have a winning trade, but if you are buying on your own or as part of minority, it will be a losing one. Pick the right team, and you're there.
  • #160
  • Apr 27, 2016 12:58pm Apr 27, 2016 12:58pm
Quoting cat
This thread is essentially all about trading with momentum, which is actually not the same as trading with the trend, it just means that you are not about to enter a trade which is about to run against you. If it doesn't, and it runs for you soon after your entry, you have correctly opened a trade in which the majority of active traders trading the same market have also recognized as an opportunity, ie, you are trading with them and not against them. this, if there is a secret to trading success, is it. If you can recognize exactly where the price...
If I understand correctly, and as seen in the chart, you use the figures on the market quite competently. In this case, you are displaying a rectangle (buy box) with the release of figures on an upward trend. For me it's interesting stuff, because I'm fond of figures and trade on momentum.
With the same success can be distinguished figure of a triangle as a signal to pulse movement.
I also noticed that you are using a reversal candlestick pattern "spike". This is also a strong signal to trade the reversal of market movement. This pattern means that the price tested the level and could not overcome it. And thus came in the rollback.
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