Technical Templates

Post your new strategies, discoveries or just ideas for development

Technical Templates

Postby Joe Whitehorse » Mon Oct 12, 2009 4:02 pm

There are one or two very impressive strategies over on the main website page of this site, none more so than this little beauty:
http://forex-strategies-revealed.com/tr ... rategy-5x5

Simple & straightforward always trumps complex & in-depth, especially where money is concerned :wink:
Locate a pair that's trending handsomely, or behaving itself, establishing clearly visible footprints & you got potential to make some decent cash.

If you can take a robust Daily chart set up & combine it with easily identifiable intra-day signals, you can more readily manage your trades & team them up with common time zone volume (activity) uptake.

The majority of the days Forex volumes are undertaken during London business hours.
2-3.00am eastern will usually signify a noticeable increase in currency activity & will generally continue into early morning New York business (7-10.00am eastern) before tailing off as the London business day, & the large volume order blocks, fizzles out.

Linking intra-day trades with the above Daily timeframe strategy, as London gears up for business, can offer excellent low risk opportunities on a very consistent basis.

It doesn't take but a few minutes at end of day, & again first thing in the morning, to scroll through the selection of pairs & identify follow-on trades.

By executing smaller timeframe trades in the direction of the larger timeframe trend, you stack the odds a little more firmly in your corner.

The opportunities are plentiful across the various pairs. This EUR/GBP set up being a classic example:
Daily bars trending up in uniformed manner
Trigger bar trading above the 5sma
RSI above 50

On the shorter timeframe (in this example the 15 minute chart), mark up the chart to focus the London open & ensure any potential trade is executed on the 'long side' preferably on or around a breakout of a prior high, or a pullback in line with a confirming price aid, such as a stochastic or rsi hook.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Joe Whitehorse » Fri Oct 16, 2009 6:30 am

A leisurely scroll through the popular traded pairings this week uncovered a couple more very good potential combination opportunities.

The EUR/GBP pair previously highlighted, although maintaining a bullish stance into early week trade, was beginning to tire & struggle up there at the .9400 figure, evidenced by those neutral daily bars on Tuesday & Wednesday.

But elsewhere, Euro was burning rubber, particularly v/s the Dollar & Yen.
Nice clean signals on the Daily chart, with the 5sma supporting the price & gaining confirmation by ticking well above the midpoint on the RSI.

I guess if you were to pick just one pair to focus on (account levels permitting), then that EURJPY pair would have won the day with the cleanest potential of the two.

Then, simply a case of scrolling down into your favored smaller timeframe of choice to trigger the trades in tandem with the larger trend.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Joe Whitehorse » Tue Oct 20, 2009 7:24 am

Same concept, slightly different timeframe combination.
Principle being, you want to step in alongside the pairs that are looking to establish a visible trend or continuation bias.

We know the U.S Dollar is presently struggling to gain traction out there.
The Euro & the British Pound represent approx 65-70% of the weighting within the Dollar Index, therefore they’re usually a good proxy for directional bias v/s the Dollar.
http://en.wikipedia.org/wiki/US_Dollar_Index

In fact, if you flip the eur/usd on it’s head you’ll be more or less looking at a chart of the Dollar Index.

If you’re looking for a lever into a short term trade, then the sensible option would be to try get aboard a pair that not only attracts good volumes (to ensure acceptable spreads & costs) but also one that covers reasonable ground over the course of a typical trading day.

The current average daily range over the past month on the eur/usd is 125 pips & on the gbp/usd it comes in around 180 pips.

You can use that information to help plan a pairs potential intraday high to low journey & also in establishing possible stop-loss & take profit levels once it begins to break out or continue a confirmed directional bias.

Of course, having access to this information doesn’t guarantee successful trades, but it does help to run the rule over a check-list of possible each way options when considering trade set ups for short term positioning. It ensures you’re at least attempting to place yourself to the correct side of the current trend whenever possible instead of swimming against an obvious tide.

Examples of the above can be seen in today’s eur/usd & gbp/usd charts. Doesn’t look as though either pair really has a taste for adventure thus far, but if they do follow the path of their most recent journey’s, those that triggered ‘long’ trades into the European action today will benefit from any further upside momentum - & if they fail to oblige, then you’ve got clear levels in which to scratch your entries & close out.

Both pairs shown below are continuing to exhibit bullish behavior, evidenced by the past weeks 60 minute chart activity, so my preferred choice at this time would be to enter on pullbacks or dips during or after the open of the London business day.

London represents the peak of the 24 trading cycle volumes, so if I was considering an intraday trade, this time zone would tick most of my boxes. If the overall current trend was up, then I’d also want to buy at an area of support & that agreed with any accompanying indicator signals I was using.

If it continues up through previous highs or levels of obvious resistance, then I’m positioned at a quality entry.
If it fails to push on & looks like it’s struggling to make any headway as New York comes online, then I’ve got the option to scratch the entry & wait for another opportunity.

Image

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Edward Revy » Tue Oct 20, 2009 9:41 am

Excellent approach!
Very much similar to the concept I use :D
Combining strategies in different ways creates simple and effective solutions, yours is an excellent example. Thank you for highlighting it so well!

Best regards,
Edward
User avatar
Edward Revy
Site Admin
 
Posts: 208
Joined: Wed Jul 01, 2009 6:20 pm

Re: Combination Strategies

Postby Joe Whitehorse » Tue Oct 20, 2009 12:07 pm

Edward Revy wrote:Excellent approach!
Very much similar to the concept I use :D
Combining strategies in different ways creates simple and effective solutions


I’m glad someone else digs ‘simplicity’
It’s such a shame that newcomers to the trading business choose to immerse themselves into the complexities of indicator led systems instead of learning how markets really operate & function.

Thanks for your comments!

Kind of run out steam after the U.S data unloaded onto the market.

Nice little profit on the gbp/usd up there at prior resistance. If you scroll across on a 60 or 240 minute time frame & take a look at the price reaction from 23 September, you’ll see what I mean.
From the days lows @ 6350 to the resistance top, it covered around 75% of the days range. No real gbp data to prime it today to be honest.

The eur/usd didn’t really take up the slack & allowed for a scratch exit on & around the entry line. All in all, a half decent example of the common potential opportunities available across the various pairings by using simple, effective analysis.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

rinse & repeat

Postby Joe Whitehorse » Wed Oct 21, 2009 3:37 am

Both eur/usd & gbp/usd setting up again this morning as London volumes pick up.
Cable is the clearer of the two opportunities, as the secondary stochastics indicator was hooking up off the lower (20 settings, as opposed to the mid point hook on the eur/usd pair.

However, both pairs are continuing to exhibit bullish momentum & positive bias, so the choice is personal.

As long as the higher timeframe signals compliment the lower timeframe trigger, then it’s ok to take the trade as long as you can plot & identify appropriate risk to back up the decision.

Image

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Joe Whitehorse » Wed Oct 21, 2009 5:05 am

The pound caught a nice follow through backwind off the MPC minutes release. No real surprises with the output, so nothing to hold it back.

Price has actually covered it’s average days range (180 pips) of today’s low @ 1.6344, so it might be prudent to either take a little profit around this 1.6550 level & drag the trailing stop up underneath an appropriate swing low from the 15 or 5 minute chart, or simply trail stop loss up to lock in the profits & let the position find it’s own level.

This area of potential resistance (highlighted on the 240 minute chart) confirms the take profit decision, & this will be the first real test of the day for Cable to progress further right around here.

If price manages to get past this initial test area, the next potential resistance is up @ 1.6630-50.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Joe Whitehorse » Wed Oct 21, 2009 8:05 am

Navajo Joe wrote:it might be prudent to either take a little profit around this 1.6550 level & drag the trailing stop up underneath an appropriate swing low from the 15 or 5 minute chart, or simply trail stop loss up to lock in the profits & let the position find it’s own level.


This looks about the most appropriate location to drag up trailing stops on either remaining position stakes, or full position, depending how you manage your trade.

It allows sufficient room to test further upside & gets you out if the positive momentum dies & turns tail.
If & when prices break out above this consolidation top here @ 6580-90, trailing stops can be adjusted up underneath the appropriate swing lows on whatever smaller timeframe chart you prefer.

This example is the 5 minute timeframe.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Re: Combination Strategies

Postby Joe Whitehorse » Wed Oct 21, 2009 10:28 am

Navajo Joe wrote:
It allows sufficient room to test further upside & gets you out if the positive momentum dies & turns tail.
If & when prices break out above this consolidation top here @ 6580-90, trailing stops can be adjusted up underneath the appropriate swing lows on whatever smaller timeframe chart you prefer.


We got the break beyond the earlier consolidation @ 6580-90 & so the stop can now be re-adjusted up underneath the next appropriate swing low.

This time I’m shifting down to the 1 minute timeframe & hiding it behind 1.6605. That locks in +185 pips off the morning entry into the London volume uptake.

It also recognizes this next potential resistance area mentioned in today’s previous posts @ 6630-50.
Note that prices have travelled 150% of the average daily range (based on the past months activity), so tucking the trailing stops in tight as London prepares to close for business isn’t such a bad idea.

Traders will be looking to book a little more profit on this recent leg & take stock of the situation ahead of the retail sales numbers out tomorrow.

So, anyway that’s the kind of thing you can do when you put everything together in a simple, straightforward trading plan.

Combining analysis from the higher timeframes with entries on a smaller chart timeframe in line with the obvious trend, ensures you get a decent chance to manage a high return trade when it takes off & goes through the motions.

Makes life a whole lot simpler if you can consistently swim with the tide as opposed to struggling against it.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Check your bearings!

Postby Joe Whitehorse » Wed Oct 21, 2009 12:48 pm

Worth a quick flip across at the Daily chart to check that maintaining a ‘long’ (buy the dips) view on the eur/usd & gbp/usd is still a valid option.

You can see that at no time over the past 13 trading sessions has price closed below the fast 5 SMA on the eur/usd.
Similar story on the gbp/usd. Price has continued it’s bullish stance, confirming the correct intraday position remains ‘long’ this pair.

Although the dual RSI & STOCHASTICS indicators are looking a bit heavy up there beyond the 80 line, warning of a possible pullback from current levels, not until price closes below the 5 SMA & begins to drop noticeably on the dual indicators is there any need to consider reversing the ‘long’ stance on either of these pairs.

A quick glance or two at the Dollar Index wouldn’t hurt either. The technical positioning on that instrument (as it approaches & negotiates it’s major support & resistance area’s) will help confirm bias & forward positioning options on these 2 major currency pairs.

As long as prices continue to establish strong bullish signs on the Daily chart, you can drop down to the smaller timeframes to better gauge & plan your preferred intraday entries & trade management preferences.

Image
User avatar
Joe Whitehorse
 
Posts: 106
Joined: Fri Oct 09, 2009 12:33 pm
Location: Teepe on the edge of town

Next

Return to Forex trading strategies and systems



cron