Technical Templates

[Ray_1]

Early London session seems to be too active. EURUSD, EURJPY and GBPUSD all hit the ATR too early. I looked at the EURJPY and intended to look for a hit and run short trade in EURJPY. H1 is bearish and price is way below weekly open. Saw a 1-2-3 trigger on the M5, but price seems to be too stubborn to break 114.50. NY Open seems to be slow and draggy without news impacting it.

[Ray_1]

As expected, EURJPY continue to be in a range as shown on H1. No point for me in looking out for any trades But I may have miss a setup on EURUSD on a pullback to previous week low. Did anyone of you manage to grab a trade from London afternoon to London close? Hope I can find better setup tomorrow.

[Carll]

Early London session seems to be too active.
EURUSD, EURJPY and GBPUSD all hit the ATR too early.

Euro was certainly out of the blocks quickly this morning Ray. A bit of leftover risk aversion from late last week working it's way through the pipes.

Price had covered at least 70% of it's average range into the Frankfurt open, but Cable was lagging behind into the London open & did offer a playable opportunity pulling back to Friday's low (6160) which represented 50% of the days range before hooking down again (5min stochs) in line with the current dominant trend.

That was the most visible set up & offered the only acceptable risk play though leading into the early week action.

[Carll]

Did anyone of you manage to grab a trade from London afternoon to London close?

Given the circumstances of today's continued move down that time window wasn't offering very acceptable risk opportunity at all.
Experience tells us that it's not usually the best window to be seeking out set ups or triggers with this type of model structure Ray.

Today especially - prices had more than covered the average days range, trend is clearly bearish & it's crawling into the european close. That combination isn't what you'd term an appetizing prospect at all.

[Ray_1]

Today seem to be a good day to trade but I was at work and unable to take any entries. But taking a review on my chart, I found a good entry on EY(I will take the trade if I am trading and saw the setup).

Price was moving above Weekly Open and H1 is bullish. On the M5, Price broke through previous day high and did a small retrace back to the PDH. I would took the long and placed my stop loss at 115.35. Will any of the M5 traders here took the same trade?

[Carll]

Hi Ray,
Personally if I was looking to execute an intraday long on that pair I'd want to deal where the potential upside offered me a bit more value in relation to the risk I was having to outlay.

As you correctly noted, 115.60 is this weeks opening price.
It's also yesterdays high. Technical areas that typically throw up decent contact entry opportunities.

If you notice, price moved up to that area after today's european open (shaded area 1 on the chart) & pulled back printing a higher low.

The pullback area (marked as 2 on the chart) at 115.20 represents approx 40% of the then current average days range.
That leaves a possible 60% or 100 pips worth of potential upside in the tank if price covered it's normal range journey.

Entering around that level (115.20) allows me to pitch my stop back at the european opening low of 114.80, affording a possible 2:1 reward to risk bet.

The level you've identified as your probable entry (115.75) means that price has already travelled nearly 70% of it's normal range, leaving approx 30% or 50 pips of upside in the tank.
Realistically, you'd need to drop your stop back to around at least the 115.30 level if you were looking at a purely technical stop.
That equates to roughly a 1:1 deal.


To be honest, the ideal location for taking on intraday bets running my preferred model of engaging via the 5 min (using the hook) in sync with any hourly directional bias, would be to leg in during the high momentum/liquidity zone around the european open (marked as 1 on the chart).

The hook is nicely stretched down under that 20 level on the stochs, & there's plenty of gas left in the average range tank if it decides to continue moving in a bullish bias!
Those are the prime value to risk opportunities you really need to keep an eagle eye out for as they form on the technical charts & thankfully they appear at least 3-4 per times per week across the more actively & heavily traded pairs.

You're looking for opportunitiess in all the right places, just try & engineer your profit-to-risk ratios a little more favorably & try homing in on the bets as they line up on & arounf the Frankfurt/London opening ticks...if you can catch those, they'll offer you fantastic value for money!

[Carll]

Here's an example of the type of conditions you want to be keeping an eye on Ray if you're looking for low risk/potentially high value intraday opportunities.

Hourly eur/usd chart confirms a bearish outlook with the 60sma sloping down & price beginning to fade underneath last weeks low.


So having got your bearings from the directional bias of the slightly higher timeframe, you can drill down into a 5 minute chart & begin identifying the most appropriate slot from which to sell into a rally on & around the open of the european shift.

We've already received some negative eurozone data this morning with the German consumer sentiment (gfk) returning a sour reading of 5.5 v/s an expected reading of 5.7 indicating a continuing soft economic climate.

Using last weeks low as a barometer & trading in sync with a lower high bias, a value entry just underneath the weeks low allows for a good technical stop-loss defense back atop the bearish flow peak at 4070.

The current average 3 month range on this pair comes in at approx 155 pips.
The entry level at 4040 represents 40% of the current days range from today's high.
That leaves approx 60% or 90 pips worth of gas left in the tank if price continues down & covers the average daily range.

So, a stop-loss of 30 pips & a potential profit of 90 pips from entry = 3:1 odds on an intraday bet.
Those types of odds are juicy bets to get in the habit of taking on. Even if they don't all pan out as intended, the typical value-to-risk ratios make them a very viable proposition for long term positive expectancy.


If you pull up a Daily chart you can begin to plan the next potential downside target zone by observing the peak-trough cycles on the last ascent off the years lows at 2870.

[Carll]

...and if things aren't developing or playing out as you expect them to, you can adapt & manage the outcome...

[Joe Whitehorse]

So, a stop-loss of 30 pips & a potential profit of 90 pips from entry = 3:1 odds on an intraday bet.
Those types of odds are juicy bets to get in the habit of taking on.

Even if they don't all pan out as intended, the typical value-to-risk ratios make them a very viable proposition for long term positive expectancy.

Agreed.
If you match a low frequency intra-day model with more than acceptable odds typical of the ones you usually highlight, then you're onto a very good thing!

Unlucky today with that short. Risk appetite has swung back to neutral this morning with slightly better than positive chatter coming out of the ECB regards the regional forward debt positioning.
But I'm sure it's simply a timing issue.
I'm more than sure you'll get another bite of that appetizing pie before too long!

[Ray_1]

Here's an example of the type of conditions you want to be keeping an eye on Ray if you're looking for low risk/potentially high value intraday opportunities.

Hourly eur/usd chart confirms a bearish outlook with the 60sma sloping down & price beginning to fade underneath last weeks low.


So having got your bearings from the directional bias of the slightly higher timeframe, you can drill down into a 5 minute chart & begin identifying the most appropriate slot from which to sell into a rally on & around the open of the european shift.

We've already received some negative eurozone data this morning with the German consumer sentiment (gfk) returning a sour reading of 5.5 v/s an expected reading of 5.7 indicating a continuing soft economic climate.

Using last weeks low as a barometer & trading in sync with a lower high bias, a value entry just underneath the weeks low allows for a good technical stop-loss defense back atop the bearish flow peak at 4070.

The current average 3 month range on this pair comes in at approx 155 pips.
The entry level at 4040 represents 40% of the current days range from today's high.
That leaves approx 60% or 90 pips worth of gas left in the tank if price continues down & covers the average daily range.

So, a stop-loss of 30 pips & a potential profit of 90 pips from entry = 3:1 odds on an intraday bet.
Those types of odds are juicy bets to get in the habit of taking on. Even if they don't all pan out as intended, the typical value-to-risk ratios make them a very viable proposition for long term positive expectancy.


If you pull up a Daily chart you can begin to plan the next potential downside target zone by observing the peak-trough cycles on the last ascent off the years lows at 2870.

Hi carll,

Thanks for taking the time to explain. I tink I am beginning to see the picture. I will try to practise what u shared here. As I look on, 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.