Trading with range bars ichimoku cloud & awesome oscillator

Hey Morishe,

You did pretty good, just learning method, so be patient amigo it takes time.

aud/jpy a double bottom formed which indicate reversal but it didn't happen right away, so you entered when price broke thru you level a more conservative entry would be to wait for a stronger break of 2 consecutive bars in a row breaking that level.

gbp/usd I'm a little confused by what you did, you had a bearish divergence marked on AO, you couldn't have entered short because price is on wrong side of the cloud,
so you must have entered long even though price is under you tl and you had a bearish divergence.

Thanks RP for the pointers.

1. What is the correct way to draw TL for a bull and a bear trend, top side or underside.
2. If AO crossover occurs in the cloud, should one wait till it exits the cloud.

Hey Morrishe, Yes you should wait for price to leave the cloud.

tl bullish underneath price, bearish above price

it is the opposite for divergences, bullish above and bearish below

Which pairs are people trading?

Also. it appears 5 PIP range bars right?

Enter when the price closes above the cloud within a couple of bars on the AO crossing over the zero line in the same direction yes?

What sort of win rate are people getting here?

3 trades today all fx

RP. Pse evaluate what did I do wrong here, What may I have see that would have prevented me selling a second time

2nd - I made a small profit.

3 rd - Small loss - what could I do here to recognise that the price could fall further.

4 th - Profit and loss - RP ure comments pse. this is the second one that I missed the signs.

hi rocky...

at the ny open i saw jpy was the strongest currency..
why on your post there is no pair jpy at all??
what your consideration makes you not trade jpy pair?
and what makes you trade those post on the above??

thx rocky..

Hi Peezeroo,

I don't trade certain currencies very often either because of low volume NZD or central bank manipulation CHF and to a lesser extent JPY. JPY also rarely shows the kind of
price movement I like. That applies mainly to USD/JPY which I rarely go near, I do trade AUD/JPY, CAD/JPY and GBP/JPY.

While I use the FX power ind. to get an idea of whats strong or weak, my primary concern is what does PA look like. There are about 20 pairs I run through after I start trading, in general I will toss half of those because I don't like the way the charts look, then I will zoom in on rest to look for type of PA I like to trade. Being consistent in
what you look for in a trade is important and I think if you look at trades I posted you'll find a lot of my charts look similar.

Hi Morisshe,

usd/jpy winner was ok, though a better entry was a bar or 2 earlier(don't know You had started trading yet), the loser you entered short on a forming bullish divergence.

aud/chf you entered the trade correctly on a bearish divergence and got out at right time, issue here is divergence made most of its move before it got out of the cloud
divergences with this sytem work better when it happens close to the cloud. Also nothing wrong with trading divergences using just a Moving avg. and the AO especially trading against the trend. I'm a big believer in an aggressive entry on dvrgs. again especially against the trend.

gbp/usd you entered short here on a triple bottom and bullish divergence, divg. didn't amount to much but it was enough to take you out of the trade.

eur/jpy first trade was ok, second one again you entered short on a bullish dvrg. and in an area of strong resistance.

I think you need to spend some time fully understanding divergences, and price patterns especially double/triple tops/bottoms, swing highs/lows. The most important thing on your charts is not the indicators it is the price action.

Hi RP, before you zoom in the chart, do you also decide which direction would you trade that pair after zooming in?
Meaning if you see like today, that USD started gaining strength yesterday, would you go in USD long direction only?
Or you just find spot for break out and go either direction.

Then (sorry for having too many questions/requests), I would kindly like to ask you, if it is not too much trouble while you trade, I think it would help us a lot to see screenshot of the charts you "like" before you zoom in.

Thank you very much for time you spend with us!

I agree 100% on the above quote from RP. Price action is king. When I trade, I always consider 2 things:
(1) If I were long here, where would I place my SL
(2) If I were short here, where would I place my SL

Since most traders lose (some estimates are 95%), we can then surmise that most traders are on the wrong side of the trend. Most traders (at least retail traders) tend to place their SL at previous swing highs/lows.

So consider USDCHF, which has been in a downtrend for most of March:


I drew a red line below the most recent swing low. This is where many longs would place their SL. Many retail traders were long USDCHF during the downtrend, and that is a good place for them to place their SL (in their minds).

Now look at the price action. Price spiked down and ran SL below the red line, then closed up off of the lows at about the red line. At this time we look at range bars:



There is a nice positive divergence with the AO making higher highs while the range bars make lower lows. Once above the cloud, I longed with SL below recent lows. There are few SL there, as they were all ran in the latest stop hunt. I then held for a couple of days (swing trade), and exit when I saw a negative divergence in AO for + 88 pips.

I did this on several other USD pairs over the past day, so had an excellent day trading long USD against many pairs.

Its all due to price action (looking at where SL were ran, and what price is doing). The range bars, AO, and cloud are confirmation.

EZ

Here is another trade I did for GU short (+130 pips). Similar explanation as above.





Remember: watch the price action (especially SL running and reversals). Big players know where SL are, and like to push the market into the SL to run to create liquidity to enter large orders in the opposite direction. Price then moves in their direction, and they exit.

EZ

EZ, very nice explanatory post, thanks for that!

I really like your aproach, but to my understanding it kinda differs from RP's.
RP's mentioned on couple of cases, he mainy looks for last 4h, not that big picture as you showed.
I'm not saying which is right or wrong, important is that one finds what suits them best.

RP does shorter term trading so focuses on last 4 hr bar. I trade that way also, but am trying to trade longer term swing trades also. That is what I posted above. Its like you said: its what suits a person best.

I just wanted to show what I look for in price action. I look at many other things as well in considering trades (fundamental news, sentiment, probabilities, COT report, seasonality, etc).

EZ

3 FX trades today all GBP pairs, EUD had some decent moves but too early for me. EZ great explanations as usual for swing trading. Endy I just look for consolidations and wait for break outs, keep asking questions thats why I started thread. I'll try to remember to post some before pictures but you might have to remind me.
Anyway here are the trades 2 were divergences against trend, Morrishe see how price action is very close to cloud, most times I will pass on a divergence is price is not near the cloud when forming.

Hi RP.

Thanks for the comments on PA and the cloud - all a learning curve.

Only 2 FX today.
I too got in on GBP with 19 pips.

The second I took a loss. The divergence had not happened at the time of the buy. What should I have read into this before I bought?

Hey Morrishe,

Actually there was a small bullish divergence, if you had noticed it and entered aggressivily on first full bar out of the cloud you could have gotten out for a small win or at B/E.

Another Good Buy, but on range chart this time.

Actually there was a small bullish divergence, if you had noticed it and entered aggressivily on first full bar out of the cloud you could have gotten out for a small win or at B/E.

 

1. I though bullish divergence should only be taken from the AO zero line. It is good to look earlier - thanks

RP.

Where should one sell in this diagram, if one can imagine them been slightly wider apart?
When the bars are below the horizontal or on the upward sloping trend line?.