Technical Templates

[Joe Whitehorse]

Well done guys, nice entries on both the Cable & Euro/usd

That was actually a sensible scratch yesterday whipcrack. You never really know how those types of situations are going to roll.
As you quite rightly mentioned, there's always another potentially profitable opportunity right around the corner.

Little bit of Yen strength coming in this morning (USDJPY) which is capping potential upside on that GBPJPY cross rate breakout/pullback set up whipcrack. You got on the right momentum horse this morning though by the looks!

Nice additional comment re; the UK data too. Always sensible to be aware of any upcoming data when you're trading these intra-day bets.

Good luck today folks!

[whipcrack]

Out at breakeven.
They didn't like the look of that initial data print very much.
It could stabalize ahead of this 1.6000 big figure, if so I'll consider climbing back onboard if I get a suitable entry.

Nice additional comment re; the UK data too. Always sensible to be aware of any upcoming data when you're trading these intra-day bets.

I don't know how you find it Joe, but my experience tells me you get an even 50:50 break on these data prints. When they go your way (& you're already onboard) it ramps up your position nicely.
When they break the opposite way, providing you're sufficiently able to pull up your stops to protect the trade, you can get out without any real damage.

I benefit from them about as much as they bite me to be honest. It all works itself out in the fullness of time.

It's all yours today goldtop - go get em!

[Joe Whitehorse]

I don't know how you find it Joe, but my experience tells me you get an even 50:50 break on these data prints.
I benefit from them about as much as they bite me to be honest. It all works itself out in the fullness of time.

Yeah, it kind of evens itself out Bobby.
The breakout/pullback entries that leg you in early as Frankfurt & London are gearing up, normally afford you sufficient time to manage the trade effectively before the main London (9.30am) data gets released onto the market.

If one of my short range signals is setting up around 9.00-9.15am & we got fairly important data printing at 9.30 I’d tend to leave it be until the data hits the market.
Nothing worse than entering & 15 minutes later getting whip lashed as the order flow gets mugged.
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If you look across on your hourly Cable chart you’ll see a horizontal zone of resistance (prior support) at approx 1.6090. Bound to be defensive sell orders & buy stops beyond the 1.61 round number mixed in amongst that channel today.

Cable will need to absorb those sell orders first before mounting a concerted push back up through that level. If the (sell) orders are thick, then it will obviously defend 1.61 pretty easily.

If it can cut a groove through that supply level it should be clear right up to approx 1.6250-6275 where the next level of decent supply (resistance) is at.

Just take a look at the strength of those red bars (hourly chart again) as the price action revisited that level each time toward the last week of January!
Tells me there’s a lot of each-way action playing out up there.

[jack mason]

If you look across on your hourly Cable chart you’ll see a horizontal zone of resistance (prior support) at approx 1.6090. Bound to be defensive sell orders & buy stops beyond the 1.61 round number mixed in amongst that channel today.

Just take a look at the strength of those red bars (hourly chart again) as the price action revisited that level each time toward the last week of January!
Tells me there’s a lot of each-way action playing out up there.

I see what you’re saying about the short side dominating the long bias on that example.

When you step back & actually look at it properly it’s quite powerful isn’t it.
So, every time price was batted back towards that channel I guess there was an abundance of short or sell orders waiting to reverse the price?

All those bunches of smallish bars patiently stepped up from the 1.6100 level 3 times that week, only to get swatted back down pretty aggressively in 1 or 2 heavy volume bars.
Sure looked like some pretty angry sellers stepped in there.

I assume the reverse holds true for demand or support levels?

[Joe Whitehorse]

When you step back & actually look at it properly it’s quite powerful isn’t it.

It is yes. Simple, straightforward & yet very powerful.

When you think about it logically, price moves up from a level of neutrality when there’s more demand than supply, & it moves down when supply overwhelms demand.
If you keep that one simple concept to the forefront of your mind & learn to recognize on the technical chart when those opportunities present themselves, you’ll get a head start on the vast majority of retail traders out there!

I assume the reverse holds true for demand or support levels?

Yes it does.
And if we stay on the Cable example you posted up here in regards to the supply example & flip it on it’s head, we can see where an area of prior demand (or support) attracted ‘long’ orders on it’s 1st revist.

4 hour chart highlighting the specific zone or area of previous demand where price was ridden up aggressively on Dec 30.



Same level revisited this week & this time changing down to a 15min chart you could use the typical momentum breaks as your trigger or set-up primer to get ‘long’ as price attracts buy orders from the level.

Think you could maybe utilize this simple concept & maybe include it alongside the other available info on here (average daily range, prior weeks high/low levels, weekly-daily open etc etc) to make money?

[shona123]

Hows it goin shona?
You added any more pairs to your watch list, or you still content observing the majors?

I’m real good Dean!
Nope, still only following the majors & eurjpy as a sort of proxy for (equity) risk aversion/acceptance.
There are plenty enough opportunities across those pairs to keep me busy over a typical weeks action.

Trust a woman to put a sensible slant on proceedings

But of course
Us ladies tend to lean heavily on the side of risk tolerance.
Can’t ever underestimate the respect for risk.

[jack mason]

Think you could maybe utilize this simple concept & maybe include it alongside the other available info on here (average daily range, prior weeks high/low levels, weekly-daily open etc etc) to make money?

You bet I could!

Been scouring my charts & have unearthed one or two clear examples of your supply & demand explanation.
A question Joe.
Can this concept be used across all timeframes, or is it best used on a specific timeframe. I'm thinking maybe the higher ones as per 4 hour, 8 hour, Daily etc. You hear folks mention on the other trading forums that newbies should only refer to the higher timeframes when analyzing & plotting trades.

Dialling back to the main theme of the thread, I note that Cable has potentially changed directional bias according to the guides of the momentum strategy?
It's broken down through the Weeks open & todays open & visibly pulled back on the lower timeframes. I've used the 5 minute chart on my example.

I'm sure I read that you guys prefer to trade this strategy during early London trading hours due to the heightened liquidity/volumes? Would you consider entering during New York trading hours if a set up triggered, such as this one below?

[JimmyMac]

I'm sure I read that you guys prefer to trade this strategy during early London trading hours due to the heightened liquidity/volumes? Would you consider entering during New York trading hours if a set up triggered, such as this one below?

Use the information however it best suits your own trading plan & preferred style Jack.
The weekly & daily opening ticks are simply price aids or markers. Same as the weekly and/or daily high-low levels.

They’re just crutches to offer a little balance when determining what actions you’re going to take as certain criteria comes into play. Remember, the market doesn’t recognize or identify with any of our indicators, price aids, fulcrums or any other item we choose to incorporate alongside our trade decision making processes.

It grinds on relentlessly, reacting to the combined mix of all the many various market participants & influences.
It constantly absorbs the input & spits it out again second by second, churning over based on dominant flow.

All you’re attempting to do is step in amongst the noise & deal at your optimum value price wherever & whenever you get the nod from your designated criteria (or edge).

If that criteria deals your hand according to the information you’ve posted, then as long as you can compute acceptable risk & you feel there’s still sufficient mileage left in the tank (average days range coverage still signals green), then go place your bets.

Price will do what price does best – react to the strength of the participation, based wholly around the current dominant influence. Sometimes, the time on the clock or the particular regional trading shift (Tokyo, London, New York) doesn’t matter a jot.

[Joe Whitehorse]

Jim makes some valid points there, especially the part where you need to gradually work out a ‘best fit’ scenario from the various components available.
You can then begin to construct them into a workable strategy that’s geared around your preferred style & risk attitude.

If you feel that the basic technical criteria contained within the information on this thread stacks up & offers you the basis of a workable foundation, then try utilize it in a way that allows you to take ownership of the structure.

That will entail a little experimentation on your part to see how best the various combinations of the price aids fit into your representation of what it is you’re looking to achieve.

If that criteria deals your hand according to the information you’ve posted, then as long as you can compute acceptable risk & you feel there’s still sufficient mileage left in the tank (average days range coverage still signals green), then go place your bets.

On the subject of the average days range info:
You can see that price bounced at the weekly open, on & around 2/3rds of it’s average range coverage.
From that juncture it still had approx 60 pips worth of gas left in the tank before exhausting the days average potential.

Knowing that, & given the fact it offered up a typical break/pullback set up, would that combined information have been enough for you to calculate sufficient risk v/s potential value to trigger a bet?

[Joe Whitehorse]

A question Joe.
Can this concept be used across all timeframes, or is it best used on a specific timeframe.

Yes, any & all timeframes Jack.
Price doesn’t discriminate. It’s a direct result of an imbalance between supply & demand, & that is reflected on the smallest as well as the largest timeframe on your chart platform.

When price ticks up 10, 25 or 50 pips, those pips will be recorded & reflected on a 1 minute chart just as clearly as they will on a Daily chart. The only difference being the amount of information (via the individual bars) visible on that specific timeframe.

I'm thinking maybe the higher ones as per 4 hour, 8 hour, Daily etc.
You hear folks mention on the other trading forums that newbies should only refer to the higher timeframes when analyzing & plotting trades.

If that’s what all the other folks are doing & the majority of them are net losers, then maybe you ought to consider doing something, or looking at things, slightly different?

Human behavior is visible on all timeframes. In periods of high or elevated intensity, this behavior leaves patterns. Those patterns have a tendency to repeat themselves over & over again. If you know how to recognize them you can more readily take advantage of them.