james16 Chart Thread

Quoting mpotis

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Thanks East,

That's a good suggestion. Perhaps I will move it to the journal section in the near future. The post was in response to a challenge that James threw out earlier in this thread about adding his price action techniques to any system to supercharge it. I thought his appeal was sincere and had some merrit as I am a big fan of his pin bars, DBHLC, etc. I will gauge the response I get here and then make a decision. The biggest difficulty for me is that I only trade on a part time basis right now and my time on the tube is very limited. I divide my time between trading or learning to trade and doing research to become a better trader. Maybe starting a journal with this system wil be just what I need to help me get to the next level of trading and becoming a full time trader trading for a living. That is my objective.

Thanks again East, your comments are always appreciated.

M

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Quoting Cobra

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Jim

Could you please have a look at the 4 hour usd/jpy.
Your opinion about a possible pinbar setup...?
Might be a little bit early, but sure looks like it.

Cobra

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Quoting mpotis

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Thanks James.

What I am presenting here is a simple trade signal generator that appears to work well on any time frame, although I personally do not look at anything below 15 min's and only rarely below 30 min's with this method.
I use candlestick charts with this method but I'm sure bar charts will work as well.

I want to make it perfectly clear that I am not the originator of this signal method. The technique was passed on to me several months ago by a fellow trader whom I thank very much and owe a great deal to and have tramendous respect for. We have been working to try and develop a complete trading system around this simple signal and I believe it has great potential. I have added a couple of filters to the few original simple rules and have learned through observation a few nuances that have proven to be successful in identifying good trade set-ups.

The technique is referd to as: The 10 - 26 Bridge Trade.

The Set-up:

On your favorite chart (any time frame), place a 10 period EMA (median) and a 26 period EMA (median).

The Signals:

Enter a long position on the close of a candle that completely crosses or "bridges" the gap between the two MA's. The candle must open below the lower MA and close above the upper MA. Two candle bridges are acceptable on all time frames and I have allowed three candle bridges on longer time frames, (daily, weekly,) as long as there is no retracement bar in between the start and completion of the bridge.

Short trade signals are the same in reverse.

That's it. This is the basic signal method as I first learned of it. Now, as I mentioned, I have added a couple of filters to the signals in an attempt to eliminate as many of the false signals as possible. Yes, there are some false signals with this method, (don't all systems have them?).

The first filter is a 5 bar HI/LO restriction. Do not jump on a signal until the price closes above a 5 bar high or below a 5 bar low. Many bridge trade signals appear on the charts as single or double bar bridges. However, if the close of the bar that completes the bridge does not exceed a 5 bar HI/LO, patiently wait until the price does close above or below a 5 bar HI/LO before making an entry. The bar that completes the bridge is counted a bar #1 when counting back 5 bars. If the next bar does not close above or below a 5 bar HI/LO, then simply advance to the next bar for an entry trigger. The current bar is always #1. When the close of a current bar exceeds a 5 bar HI/LO, then a trade can be entered in the direction of the bridge.

The second filter is more subjective and uses the Bollinger Bands, (default) to determine market volitility. When the market has made a recent move of appreciable size, the Bollinger Bands expand to reflect this volitility. After the expansion, the bands collapse back toward the median price range. During this contraction, the market is generally moving into a period of consolidation. The duration of which is relavant to the time frame of the particular chart you are looking at. During this period of consolidation, I have observed many bridge signals that either signal small gains or are false signals indicating only losing trade set-ups. Some of the best bridge trade signals appear just after a period of very low market volitility commonly known as "the Bollinger Squeeze". In this scenario, the bridge signal is a very accurate indicator of a volitility break-out move.

Trade Management:

I generally let the market decide where to place a stop loss. Most often it is 5-10 pips above or below the bar that started the bridge signal. If that price level is to tight to the current price level relative to the current noise, I will place the stop 10 pips above or below a recent swing hi or low relative to the bridge signal and adjust my lot size according to my MM rules.

Exit strategy: This is an area that needs more work, but generally speaking while my trade entry is based on a series of "ANDS" my exit strategy is based on only one "IF". The first close below the upper MA in a long trade or above the lower MA in a short trade is more often a short term pull back from the beginning of the move. I will generally stay in the trade through this period and maybe take half or a third of the position in profit at this point. A close below the lower MA in a long trade or above the upper MA in a short trade is deffinately a signal for me to exit, though I may have given back a good deal of profit at this point. The trade may regain momentum and continue on. I will then look for opportunities to re-enter the trade on shorter time frames. I have also included a 100 period SMA and a 200 period SMA to my charts and I use these as levels of support and resistance. A bridge signal in close proximity to a bounce or failure off of the 200 or 100 SMA is a very strong signal.

This is still a work in progress and I believe there is good potential for this method.

Place the MA's on your charts and take a look back at the GBPUSD pair. You will be amazed at how many of the good price moves started with a bridge trade signal present.

I have attached a few chart examples as reference to the above.

I welcome your comments and suggestions. Thanks for your time.

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Quoting james16

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i know you spent a lot of time here mp, havnt forgotten about it. i want to look close before i post.

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Quoting mpotis

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----------------------------------------------

"I'm not waitin' on a lady..
I'm just waitin' on a friend..."

Mick Jager - Rolling Stones

-----------------------------------------------------

Take your time James - Rome wasn't built in a day, (or two).

M

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Quoting james16

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...can you imagine may, walsh, sattrianni and vai all on guitar and wakeman on keyboards playing rocky mountain way. ive watched it a thousand times and i get chills every time.

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Quoting james16

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ahhh m knows his classic rock. just watching a bootleg from a 1992 show in seville spain. brian may, joe walsh, joe sattriani, steve vai, rick wakeman and paul rodgers. its unbelievable. i may be the only person in the usa who has it ( well maybe not). can you imagine may, walsh, sattrianni and vai all on guitar and wakeman on keyboards playing rocky mountain way. ive watched it a thousand times and i get chills every time.

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Quoting accrete

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OH MY WORD...That brings back memories. There was a "Day On The Green" in the Oakland Coliseum in the mid 70's that i went to that had most of these guys on stage. Wow what a concert! Well, what i remember of it anyway... Glad i survived to tell my kids how NOT to spend your teen years!

: ) Thom

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Quoting mpotis

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Sattriani kicks ass!

sounds like one heck of a show!

"and we don't need the ladies cryin' cause the story's sad....
and the rock mountain way is better than the way we had...."

man... this just makes me want to dig out some classics and just jam the rest of the night!

M

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Quoting james16

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yeah i remember some good ones from the 70's as well. what a great time those days were. i saw led zep in 77 in dallas. bad company had played the night before and were still in town. 3 hours into the show they joined zep and they jammed together for almost an hour. i actually remember that entire concert. man what i could get for a bootleg of that. a lot of people might be surprised how the eagles could rock the house. saw them 5 times, man what a show. best live show i ever saw was kansas number 2 would have to be yes in the round.

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Quoting forexpips

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Thinking that the short here looks interesting. The GBP has hit 1.8990-1.9 three previous times and has retreated. This double top looks like a great setup.

Thoughts please.

forexpips

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Quoting mpotis

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I saw zepplin that same year here in Detroit, (Pontiac Sliverdome actually).
was an incredible show. Some moron threw an m-80 off an upper balcony and it went off near the ear of a girl that I knew. she lost her hearing in that ear. put a downer on the whole evening.

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Quoting summitfx

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mpotis:
Slowhand- The Clapton God rolls thru Michigan next month

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Quoting james16

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wont be long before all my old guitar heroes will be in rocking chairs. im not far behind them. hope i live long enough to see both.

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Quoting summitfx

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I can't remember how many concerts I've seen at the Tarrant County Convention Center in Ft. Worth during the 70's. Three Dog Night was the first concert! Wow~ the tracers coming off those joints being passed around on the floor was really trippy!

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Quoting summitfx

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mpotis:
Clapton, Roger Waters and The Who all roll thru Michigan next month

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