Technical Templates

[Carll]

I feel the theory you explains here is not only suitable for M5 traders like me, it can also be implement in those hourly or even larger timeframe traders.

Absolutely it can yes.
It's simply using combinations of data (timeframes) to formulate a consistently applied structure.

The primary or default timeframe (daily, 480m, 240m, 60m etc) is your base structure where you do all your core work such as determining the bias or current trend.
You can then choose to drop down to a secondary timeframe of choice (if you prefer) in order to time, focus & manage the entry & also manage the trade if you so desire.

There's nothing complicated or complex about it at all.

By adapting & putting your own stamp on the structure of what Tess, Jocelyn, Jimmy, jjay, Andre Mayer, Sean P & the other guys over on the Technical Templates thread have been demonstrating since 2007, you can fine tune your own model to slot alongside that structure.

Bolt on the previous week high-low along with the previous day high-low, add in the average days range as a back up & pay attention to the obvious swing levels up & down the price ladder & you've got yourself a solid, ready made framework from which to attack the market.

[Carll]

Here's another example of the concept model coming into play this morning Ray.

Bias has flipped from bearish to neutral/bullish on the primary (hourly) timeframe, therefore the focus is now directed towards trading from the long side.


Into the European opening ticks price had travelled approx 60% of the average range off the Tokyo open flattening out around the 4150-60 level.
So you know it leaves 40% or approx 60-65 pips worth of potential upside if the bulls can support this lift off the weeks lows & push price further up.

Although there were 2 hook signals this morning, the only realistic one was the second circled example at the 4160 zone as Frankfurt came online.
That offers a potential 2:1 bet by slotting the stop-loss underneath that support ledge at 4130.


If you missed that 1st opportunity another one has just presented itself into the late morning action ahead of the U.S Open, again at the same 4155-60 entry level.
Obviously, if the european morning highs up at 4190 prove to be too stiff to overcome, it offers the chance to scratch the trade for minimal risk, as per yesterdays trade.


As long as it doesn't cost you too much money to test these important levels out you can get some very cheap entries into potentially explosive moves up & down the ladder….some which can set you up for 3-4 day/multiple figure runs when they really catch a decent momentum move. And some of those babies return in excess of 15-20:1 when you get an ultra-cheap entry!

[jjay]

Bias has flipped from bearish to neutral/bullish on the primary (hourly) timeframe, therefore the focus is now directed towards trading from the long side.

As long as it doesn't cost you too much money to test these important levels out you can get some very cheap entries...some which can set you up for 3-4 day/multiple figure runs when they really catch a decent momentum move.

1.4130 is the top (2) of a 1-2-3 four-hour timeframe pop off this weeks lows. If it can gain a little traction around here you might just get a piggyback ride up towards last weeks high @ 4345.

Core PCE, the Feds favorite measure of inflation, just hit the wires at 1.4, which falls shy of the expected 2.2 upward revision number.
Unless the market had begun to factor it in, that kind of disappointing data points to the Fed holding fire on any possible rate increase in the near term.

New York needs to maintain this early european bullish tone into the close.

[Carll]

If it can gain a little traction around here you might just get a piggyback ride up towards last weeks high @ 4345.

No leisurely piggyback ride today buddy!
A break even scratch keeps the powder dry until the next opportunity rolls around..

Intraday longs scrambling to cover on the back of eurozone official Junckers negative Greek funding comments.
You'd have thought by now that traders would take a few deep breaths first before knee-jerking every time Greece bailout money is batted back & forth.

Oh well never mind, no harm done.

[Ray_1]

Here's another example of the concept model coming into play this morning Ray.

Bias has flipped from bearish to neutral/bullish on the primary (hourly) timeframe, therefore the focus is now directed towards trading from the long side.


Into the European opening ticks price had travelled approx 60% of the average range off the Tokyo open flattening out around the 4150-60 level.
So you know it leaves 40% or approx 60-65 pips worth of potential upside if the bulls can support this lift off the weeks lows & push price further up.

Although there were 2 hook signals this morning, the only realistic one was the second circled example at the 4160 zone as Frankfurt came online.
That offers a potential 2:1 bet by slotting the stop-loss underneath that support ledge at 4130.


If you missed that 1st opportunity another one has just presented itself into the late morning action ahead of the U.S Open, again at the same 4155-60 entry level.
Obviously, if the european morning highs up at 4190 prove to be too stiff to overcome, it offers the chance to scratch the trade for minimal risk, as per yesterdays trade.

As long as it doesn't cost you too much money to test these important levels out you can get some very cheap entries into potentially explosive moves up & down the ladder….some which can set you up for 3-4 day/multiple figure runs when they really catch a decent momentum move. And some of those babies return in excess of 15-20:1 when you get an ultra-cheap entry!

Hi carll,

Thanks for showing me another good examples. From what I see, taking an entry at a good location with a good R:R is the key for the trades to work out. Today I am able to trade the London afternoon session up to the NY open. But sad to say that I did not manage to take any trades. EURUSD and EURJPY decide to take a plunge downwards. Before that I was looking for a long entry. But the entry did not appear. Well at least I live to fight another day.

[JimmyMac]

From what I see, taking an entry at a good location with a good R:R is the key for the trades to work out.

It's one of the most important aspects of any model Ray, not just this one.

If you can construct, develop & maintain a simple, effective model based around repetitive price action behavior & bolt on a smart risk module that offers you consistently cheap tickets into the market to test the appetite, then you're onto a real winner!

It's imperative you keep good accounting records to ensure you're closely tracking your expectancy values.
The benefit being you'll be in a position to quickly pinpoint & highlight any potential hiccups or inconsistencies in your model which in turn will help to identify changes in market sentiment that might be directly impacting/skewing the results.

[spotfx]

As I look on, I feel the theory you explain here can also be implemented in those hourly or even larger timeframe traders.

You can certainly adapt this type of technical strategy to trade across the larger range timeframes for sure, & it will work just as effectively as it does on the shorter range ones.

I'm sure we don't need to point out the importance & necessity of running both long range as well as short range strategies when trading these volatile markets.
The obvious & primary benefit being the smoothing effect that it affords when markets continually chop back & forth between range volatility expansion & contraction.

[jack mason]

A break even scratch keeps the powder dry until the next opportunity rolls around..
Intraday longs scrambling to cover on the back of eurozone official Junckers negative Greek funding comments.

Pretty much another straightforward opportunity to re-use that powder again today Carll as the market got back in step with the weekly bullish flows.
Junckers comments got trashed (as usual) & risk appetite re-engaged into the late week (& month end) book squaring.

Primary (60minute) timeframe still indicating a positive bias, therefore shorts are ignored in favor of going long dips.


Secondary (15minute) timeframe offering strong triple confirmation by way of the bullish divergence & pullback to yesterdays high keying off a round number (1.42)


And the stochastic on the 5minute trigger timeframe hooking up in tandem with the 15minute through that round number + the 1.42 morning pullback zone represented 50% of the days range so it also ticked the risk-value ratio box.
Not to mention a hammer showing up bang on a key round number level.

[Ray_1]

Hi carll and jack,

Judging from the examples you guys had posted here, you always look for a HH and HLto long and a LH and LL to short (dependent on the Primary timeframe bias). The stochastic is just a confirmation. Dependent on Price movmeent if there is no stochastic cross, but HH HL develops you will still take the trade. Am I right to make that assumption? Pls advise.

[Carll]

Correct Ray.

The objective of the exercise is to trade in sync with the current dominant flow of the market, which is especially important when you're executing intraday bets.

It's an absolutely critical minimum requirement.

Adopting that as the very foundation of your structure not only increases the odds of a successful outcome, but usually allows you to quickly identify when the conditions aren't playing ball, such as the timing out condition that was referred to in an earlier post last week.

To quote an oft used comment from the guys on the Technical Templates threads:
"Swimming with the tide uses less energy & allows you to cover far more ground than constantly attempting to struggle against the elements"