Plan the Trade

Finding it too difficult to ignore trading during the morning (GMT). So researching if there are any viable options whilst waiting for US markets to open.
The FTSE on SB suffers too large a spread for each typical move, so that is out. It also requires ICE data at $110 a month with Futures trading.

The Dax simply does too many impulse moves on every single scale to be worth watching (imo). Occasionally it trends nicely, but 'occassionally', is not good enough, as boredom sees too many wrong trades or too much time spent watching and not trading. It encourages mistakes. (again just imho).

The EU does appear to throw up a few good set-ups, but again, it doesn't move enough points unless something newsworthy is happening currently in the real world to cause some volatility. The problem then is, that volatility can become a little less predictable and dangerous.

That leaves the UJ as my other short list candidate and probably the most likely to give both enough corrective moves (for the choppy pullbacks we need), combined with just about enough points to cover the spread and make it worthwhile.

Still not ideal, compared to Futures, but as i say, for GMT morning trading, if you have to do something, i think it is the pick of the bunch.

Now here's the thing, this needs to be tested out for far longer yet, to see how it plays out, but i reckon it has a habit of using prior S/R points from previous subwave, then to it's current subwaves.

How can i simplify that statement and explain it properly?

Ok so here is a chart of the Uj from this morning;



Hopefully, you can grasp what i mean. The blue lines would be the pullback to subwave (i) of each cycle, however, it virtually never connected to one of those all morning, whereas, if you look at the red lines - each time the prior peak of a sub cycle was retested and gives a good reaction. Ok, sometimes there is slight carry through to allow for regarding stops and it is in hindsight, thus it takes some getting used too to try and mechanicalise the method, however.... there are some canny trades in amongst that chart...

I still can not help but see each 123 trigger as (at that stage) possible abc corrective, so i am still tweaking as to how to play that. For me it is safer when there is a minmum 3 peaks to confirm trend, however, the move down to the right of the chart from the top, (red circle), looked exactly to me as a 5w move, (blue channels) with an irregular 'b' wave, thus i was expecting a decent fall, (remember what i said about 'irregular' 'b' waves? expect a strong ensuing move with underlying trend). The retest was pinpoint perfect and some strong red candles follwed up... Nice!

Easily my favourite set-up now!

Ignore the EW labelling, if it confuses. The simple fact is, V shaped reaction and bounce, followed by a smaller one, followed by the break and retest from below;



BOOM!

good stuff CG. have been watching the moves on UJ all day also and looking to see how the trades might have worked out. the mt4 tick chart is more "rough". still looking to see what amount of ticks from my broker will give the best picture/opportunities.

Observed this reaction earlier on the Q's and caught a large chunk (+28) of the upmove so far (demo Futures);



The thing is, i'm watching the upmove with an EW eye as opposed to pullbacks (as there hasn't been much!)

*edit* just added a quickfire +12

Updated chart (with added labels);

Just gonna repost the FTSE set-up from last week, directly below last post of Nasdaq for comparison;







Pretty damn similar huh?!

Dow playing ball too. This is a hindsight chart, but clear 5w to a fresh high and ensuing abc (3w) corrective bouncing clean off of the 61.8% retracement fib, means one more fresh HH as a minimum;

Dow again and it's turned into a very good day indeed. Just added +15 with a quick entry into a 'c' wave;



It's the ending diagonal (blue channel lines) that give the head's up in this case. The following 'a' wave makes a HH and that is all i will look for to buy the retrace to subwave (i) - (blue circle). No heat, instant $'s and a smile...

Remember to leave lines on your chart or to at least pan out every now and then to see the bigger picture. I just got turned inside out by a vicious algo tonight. Not exactly losing much, (i gave back about 4 pips), but the fact that i had 3 BE's amongst them with potential 24 pips available max, it either means i was being too greedy or that, as i say, it was a nasty algo. Every time you think you have a trend established, it changed. My entries were excellent, but no follow through, just as i was expecting it... the opposite a strong reverse every time. I am exhausted now. I feel like i've just been a couple rounds mith MT!



Here's the thing, i noticed this point on the chart nice and early, but still got taken out of my long....... and short...... and long again! In fact just looking at the bigger picture would have been far more successful.

Righto, strangely i feel good, because my position management could have meant quite a substantial loss in stead of just a coupld of pips, yet of course, i have to reconsider why i let some good profit dissapear too. It mostly comes down to being Spreadbets, i think. No chance to get up enough pips for auto BE as in trading the Q's in futures.

I'm convinced that if it were Futures, the result of tonights session would have been markedly different. Fiirstly, because i had two stop outs by width of myt spread, (which wouldn't hve been the case with Futures) and also because City Index's platform doesn't let you point and shoot on the chart to set a limit, without entering it manually first. I missed two entries tonight by literally a couple of seconds, filling in the entry and a strong candle took the entry away from me. Extremely frustrating when it goes onto be a decent winner. Plus the fact that in Futures the pips become 'ticks' which would have simply accrued more in total....

If you extrapolated it out into ticks i guess there would have been perhaps double the number in excess of 40 available and to think that i wouldn't have kept grabbing what was available? i doubt it. Again, another example that the spread and lack of ticks add up to SB being totally against the scalper.

Tomorrow i will open a Futures account and make the switch...

One way of viewing the retest in kind of opposite fashion from the 'bounces' becoming weaker from above;

(EU);



Trend is down, we create a reaction point, break it and then the retest reaction bounces get larger as buying pressure wains...

Aggressive style or non aggressive style?! Take every pullback after a 123 until it fails? or use EW 5w/3w to determine safe plays?



Wait for the break of sequence in subwaves followed, immediately by return to trend and trade the pullback to last supply/demand zone.

Here, bearing that in mind PA was not kind to us after 3 peaks (5 waves), on way back to long side. Wave 'b'/2 did not create break of sequence for clue....

Dow, saving the best til' last;

This is what we want... and when do we want it?!




NOW!

Quickfire +12

I said now, well... it wasn't long before another +10;

Really wanted to post this on Harold's thread, but i already see the reaction i get from posting such charts there... and i suppose, quite rightly so, as EW labeling does detract from essentially an ideal simple method...

The plain fact is though, that these charts are so closely linked to H's method, that i can not simply NOT post them!

Someone asked for advice regarding a pullback from a screenshot of H's video from late last month;



I basically posted this as a reply;

You have to be careful around such areas. The important factor here is that it did not make a LL, thus trend is 'up' on the next higher degree.




The first small 123 and pullback short, is a good trade... but whenever we get near to a previous inflection point, it becomes more important to see if it gets broken for trend continuance, or the opposite, (this is a generalisation, of course).

On the next degree up again, the trend is still down, until the peak to the left is broken. So you see how important it is to match the timescale of the trade that you are planning on taking. If you look, we are actually just printing sideways action, after the fresh HH, which is why i say, that the small 123 and subsequent pullback, was good to go, but the LL followed by HH, always suggests caution. Wait for a trend to establish itself... (This is Harold's thread, so that is just my own opinion, of course!).

As an aside, in EW world, the channel to the left was clearly in 5w and that can not be a single set, together with the crossovers for wave B, (which means it was corrective), meant that a fresh high was the most likely course for wave C - in this instance it was 100% (equal to) wave A;



Upon whereby, it is obvious, that others do not want to see such labelling, however.... can you see the relevance?!
Take my wave A&B.... now consider it points 12&3 of a 123... wave C is the trigger, so should we buy the pullback?

The answer is 'NO'! because i have shown that i believe it to be a simple ABC corrective move. The labelling strongly suggests it to be correct. Thus the overall trend should continue short;



This is EXACTLY the same as the OP's question... which was; 'why not put a sell limit at the pullback?'... I'm saying that on the next larger degree, we are facing EXACTLY the same question and yet, my belief is that it should be over-rode by the thought that the moves in blue were corrective to the next larger degree (which is short!).

This also has relevance as posters can not determine when to hold a position and when to cash in, but if we can determine that the next move will likely be 5w impulsive, we can predict some minimum targets (in this case a fresh low).

I just went back through my charts, (as this was from 26th Jan). I needed a larger timeframe in which to view it, but here it is;



So all in all, even if that is a little heavy to follow, you can see how disappointed i become that i simply can not convey this over to H's thread, despite it having strong relevance. If you zoom out, my ABC in blue is simply a 123, that triggers, but fails. This is fractal and the key to which trades will continue trend (win) and which will give you grief.

Bit of fun;

Dow and i've had this level on my charts for a very long time now;



Who knows if those fib levels are the correct ones? time will tell of course!



Not that it has any relevance, bearing in mind we trade for a matter of minutes, sometimes seconds at a time, but... there is no rounded top forming. No real battles between bulls and bears... just relentless buying and i can not see that changing in an instant to create a V shaped reversal. Only if WW3 breaks out tomorrow....

Haha! I take 'Holy basil' & 'Moringa Oleifira', like it is going out of fashion to try to reduce stress!

It is so difficult for me to post without adding my EW view, but another point about the slight fresh HH (or LL) before reversal is explained that an impulse cycle usually will print a slight fresh high (or low) as a 5w complete cycle, before it's ABC corrective waves (kind of like a clue as to it's desired overall direction)... this is basically how the 2B is born (note the H&S pattern) and what is referred to as the Bull/Bear trap. An example if i may;



and the relevance for everyone else reading, is that if you zoom out - that 5w followed by 3w is usually all a 123 actually is. It is fractal. In this instance it was the fib level dictating the pullback level and it did not quite connect with the top of subwave (i) - (this would look like a doji on a larger scale).

Those bull/bear TRAPS are the 2b warning signs

I posted it over here Harold... they don't like my labels and numbers over at yours! haha!

Whilst i was looking for an example, i came across a chart from a year ago. It was EurJpy, but it shows both the 2B after a cycle complete on two different scales. Also the vague outline of the trading pullback to previous S/R level;

Less trades is more for me...

Everything falls into place when i let EW suggest a trade and then it pans out. Let the trade come to you as opposed to trying to make it fit.

Dow earlier;



Clearly ABC corrective move as a flat. C in easy to read 5w. Next we print our 123, which gets triggered by break of point 2. Limit buy order is placed a tick above subwave (i) of trigger leg (red circle), result is no 'heat', straight into profit. High probability, thus confident position size, good R:R ratio and because we have printed an ABC (corrective move), minimum target is a fresh HH;



+20 and probably should have held for longer, but the minimum was reached, so a bird in the hand and all that...