Technical Templates

[bigdog]

Below is the 1H chart of the EURUSD.

My bias is now short as I look at the 60 min chart with the 20 SMA. Looking for some discussion here for anyone who wants to comment.......



Looking at the 4H price is making lower highs and lower lows. Short bias

Looking at the daily the bias is long.

In a nutshell I will be looking for a short entry up there in the 3200 area.

One final observation. On the 4H price is consolidating between 3050 and 3200.

This is what i see.......

[Carll]

Whilst I don't disagree with your immediate tactic of shorting euro into the 3200 area bigdog (as it's quite apparent this region presents very visible resistance), I see this pair as a little rangey & rather choppy for my tastes at the moment.

In fact if I was pressed to trade this pair currently I'd be tending to view it from the long side rather than the short side. Reason being I see the 1.30 area as a fulcrum from back as far as early December.
For me that area will need to breakdown & hold on any re-test to get me short. But for now eur/usd isn't at all appealing from a short-term trading perspective.

There are more appetizing pairs out there (for me at least) to get my teeth into that are adhering to the type of technical set ups I prefer to take bets on.
For instance, Cable & nzd/jpy are 2 pairs displaying clear bias behavior & trigger set up opportunities based around the material shared on the thread.

The 4 hour charts of those pairs highlight the typical stair-step, peak-trough price action that encourages me & the other regulars here to drop down to the 1 hour & explore the usual pre-trade setup/trigger combination (stochastic hook/bar print behavior) to get aboard.



I'll then look to the 60m primer chart to show me the usual hook display along with the typical bar prints generally identifiable with swing high & low herd behavior (hammers highlighted by the circles), inside bars etc.

Obviously dropping further down the scale would then open up the simple hook triggers on the sub hourly charts affording keener risk/higher probability entries.
For me that typical easily identifiable & visible bias behavior with orderly top-down structure always trumps the choppy, indecisive price action of more rangey price action such as that currently displayed on the eur/usd...................but as the guys often remark on here – if you can play that type of market & profit consistently from the behavior, then carry on plugging away!

[strobe]

As far as EUR/USD goes bigdog I'm with Carll regards the current bias.
I'm currently adopting 2 discretionary models using this material as my framework & the more sedate of the 2 outlooks utilises the stochastic hook signals via the 240 minute chart & engages the market trigger from the 60 and/or 15 minute timeframes, with the objective of achieving slightly longer term profit potential.

My recent trigger came on Wednesday morning through 1.3050 as the signal hooked up via the pullback for the 1st time since the bias flipped from short to long (using the 60SMA as my guide) from the middle of January. Therefore, for the time being anyway I'm only looking for long entries until the bias once again flips back to the short side.



The same outlook obviously applies when the directional bias is to the short side. It's simply a mirror image using the hooks on the 240 minute off the 80 region seeking entries on familiar bar patterns such as those regularly presented on here & the Templates threads.



The only other pair I've been trading of late is the AUD/USD which is clearly trending nicely to the upside & offering reasonably good odds to engage with the bias from the long side via pullbacks as explained in the above paragraph.

[shona123]

I have a few questions on trigger options and would like to hear others' opinions please.
I am looking for a 1-2-3 in conjunction with a stochastic hook on the 60/5 or 60/15 minute charts to enter.
My difficulty is determining where I should place my stop as the S/R zone often can be 30 pips wide.

Should stops be placed below the S/R zone (below 1.0660) on the basis that buyers may come in anywhere from 1.0685-1.0660 or have others found that a tight stop below point 1 on the 1-2-3 is sufficient (assuming there is an acceptable Risk:Reward for either)?

Technical stops (above or below logical swing levels, prior days highs & lows etc) are often utilized as safety net options West.
They're intended to offer up an early warning signal to inform you that perhaps the reason you originally entered the trade is maybe no longer valid or likely to return you positive results.

The general idea with these types of technical stops is to tuck them behind levels that offer you a reasonable chance to check out whether the market is continuing to honor the bias according to your entry/trade management & exit objectives.

If a technical entry dictates that you need to set your stop back at say 38 pips to cover a level, then you will need to adjust your position size or stake to fit that risk %.
Sometimes 30 pips will suffice, other times you'll need 45 pips or 53 pips etc etc.
Whatever the amount is, you will need to adjust the position sizing accordingly so that it remains constantly inside your maximum risk capital outlay.

[hawkmoon]

Hello everyone
This is a very interesting thread and thanks to all those who have contributed.
I have a few questions on trigger options and would like to hear others' opinions please.

Using AUD/USD as an example, I have marked out the S/R zone from last weeks high to about 1.0660 as a likely area for fresh bids on a pullback.
As per the excellent examples described here, I am looking for a 1-2-3 in conjunction with a stochastic hook on the 60/5 or 60/15 minute charts to enter.

My difficulty is determining where I should place my stop as the S/R zone often can be 30 pips wide. Should stops be placed below the S/R zone (below 1.0660) on the basis that buyers may come in anywhere from 1.0685-1.0660 or have others found that a tight stop below point 1 on the 1-2-3 is sufficient (assuming there is an acceptable Risk:Reward for either)?

hallo West,

i tend to place my stops underneath the 1 of the 1,2,3 when i am seeking to take intraday trades, & particularly if the ADR is flagging up good potential. i have found through experience that if you are tradeing with the dominent bias or trend from the higher timeframe then that vicinity should be sufficient to get your trade away safely.

if it fails to stay above the 1 of the 1,2,3 set up then it isn't really a strong or valid signal in my opinion.
i also strongly agree with shona's risk & bet size comments. that should always be the case whenever you are assessing the potential of a bet regardless whether it's an intraday or longer time duration objective.

that is how i have contructed my position sizing ever since i found the technical templates threds on the other forum & it has worked very well for me ever since. it's actually an excellent & perfectly logical method of compounding your account (& bet sizing) on a gradual incremental basis. it also benefits & controls the account when you enter into occasional drawdown phases where a small string of losses are experienced.

[2Taps]

Hello everyone
This is a very interesting thread and thanks to all those who have contributed.

You're not kidding. I found this forum & thread last July. I read it through the first time in 2 days then spent another couple of weeks revisiting various aspects of the material & replicating the set ups on my own charts. I demo'd up to the end of 2010 & began trading a small live account on January 4th.
So far so good & I'm using the core framework & suggested triggers exactly as advised.
The primary bias/trend is ultra simple to identify & prepare for.
The set ups & triggers are clear, also very easy to identify & simple to execute. The one huge benefit I've found when trading this type of technical strategy is the total lack of complexity. There are no confusing or contradictory options to work through. As a couple of other posters have remarked, there's either a potential set up occurring or there isn't. I like that. Simple, logical sequences that work.

I'm more confident & assured with my trading than I've ever been & can now easily identify & prepare my primary bias from the 4 & 1 hour charts more or less immediately when opening up my chart profiles.

I've spent nearly nearly 3 years wasting my time trudging through those awful sites (Forex Factory, Trade2Win & Oanda to name but 3) trying to put together a learning topic to assist me with my ambitions & very nearly gave up until I found a link to this forum & found this fantastic thread.
You're all top guys as far as I'm concerned & thank you very much for keeping this thread active & always informative. Although I've made remarkeable progress over the past few months I feel like I haven't been run ragged trying to cram loads of confusing idea's & information into my overheated brain & that is a great credit & compliment to the way the material & advice is dispensed.

In fact if I was pressed to trade this pair currently I'd be tending to view it from the long side rather than the short side. Reason being I see the 1.30 area as a fulcrum from back as far as early December.
For me that area will need to breakdown & hold on any re-test to get me short.

As ever, you guys are bang on again with the bias. I've been trading dips back to support (hooks up off 20) that offer the clearer set ups on EUR/USD, GBP/USD, AUS/USD & NZD/JPY shorting rallies back to resistance (hooks down from 80) on EUR/NZD & USD/CAD.

The thing that makes me smile broadly & encourages me immensely is how many across the forum network on the various threads are still strongly backing most of these pairs (especially EUR/USD) from the opposite side. There are 2 threads on Babypips where most of the posters have been trading a short bias on EUR/USD & they're supposed to be following top notch advice & supposedly experienced traders - hah hah.

[West]

Thank you for your replies Shona & Hawkmoon. I generally look to get a seat at the table targeting average weekly range numbers/outer S/R targets so I've been giving my stops a little more breathing room which allows for acceptable R:R with a wider stop. Squeezing out maximum reward for risk outlay is my goal though so I will demo placing a tighter stop below point 1 and see how I get along with it.

If a technical entry dictates that you need to set your stop back at say 38 pips to cover a level, then you will need to adjust your position size or stake to fit that risk %.
Sometimes 30 pips will suffice, other times you'll need 45 pips or 53 pips etc etc.
Whatever the amount is, you will need to adjust the position sizing accordingly so that it remains constantly inside your maximum risk capital outlay.

i also strongly agree with shona's risk & bet size comments. that should always be the case whenever you are assessing the potential of a bet regardless whether it's an intraday or longer time duration objective.

Absolutely agree. My risk management is the most important thing in my strategy. I have a fixed % of capital that I risk per trade and I adjust my position size accordingly based on stop levels.

Cheers
West

[JimmyMac]

The primary bias/trend is ultra simple to identify & prepare for.
The set ups & triggers are clear, also very easy to identify & simple to execute.

And so they should be. In fact there would be a major problem if you couldn't easily & quickly identify the core structure of your strategy or model.
It's this basic, essential part where most folks struggle & become discouraged. Their framework, structure & trade confirmation exercises are usually way overcomplicated & unnecessary.
Never has the much quoted comment; keep it simple, yet logical taken on more importance than when describing the core elements of a successul model.

The one huge benefit I've found when trading this type of technical strategy is the total lack of complexity. There are no confusing or contradictory options to work through. There's either a potential set up occurring or there isn't.

Exactly.
The material has been managed & presented in such a way as to deliberately encourage interested parties to adopt a minimalist yet effective, disciplined approach.
It allows you to focus more on the market structure (s&r zones/key reaction levels/market drivers etc) that influence & dictate directional momentum based on repeatable psychological influences that the "herd" consistently react to time after time after time.

You should never have to force a trade or set up. Neither should you really need to put yourself into a position where you're requiring to work hard to spot a potential opportunity.
If you can't identify a clear unambigous bias on your primary timefame chart within 10 seconds of opening it up then move onto the next pair or instrument.
Same goes for the set up/trigger combo. If one of your watch pairs/instruments passes the initial bias check list stage & looks like setting up a potential entry opportunity, you should be able to bring your trigger effortlessly into play on the back of easily identifiable technical set ups that you've evidenced via repeatable, successful outcomes.

Although the generic approach on this thread is a discretionary one, the identification of the bias, set ups & triggers are very much rule based mechanical elements that complement each other & afford you flexibility & control.

Although I've made remarkeable progress over the past few months I feel like I haven't been run ragged trying to cram loads of confusing idea's & information into my overheated brain & that is a great credit & compliment to the way the material & advice is dispensed.

That's good to hear.
The proof of any pudding is obviously in the eating. And if you & others can construct & mold your own style around the generic framework & structure of the material contained within this thread in a way that ensures you're making positive progress, then I guess its achieving its aim.

[zilly]

I've picked 2 pairs from my watch list that have begun to adopt neutral type behaviour, flattening out & perhaps attempting to flip their previous dominant bias.
Cable has developed a couple of lower highs from it's recent top at 5950 & is approaching a key support zone highlighted on the chart.
In my view it needs to attract demand here in order to get me interested in buying dips. If it fails around here, then I'll drop down into my 60 & 15 minute charts & start seeking out short opportunities via hook set ups into the London trading session.

The 2nd neutral pair is USD/CAD.
The double bottom at 9920 has yet to be fully confirmed in my view, & will only inspire me to begin buying dips as per the above explanation should it break through & test the resistance zone indicated in the chart.
I'm leaving these 2 pairs until they either slot back into their previous dominant trends, or confirm breaks through their respective s&r zones.


2 pairs that are still on my "buy dips" menu & displaying slightly clearer bias movement are NZD/JPY & AUD/CAD.
I'm continuing to execute longs via the 60/15 minute timeframe combination hook triggers & have noted their respective support levels where price needs to attract further demand to support the long view.
Until those area's come under pressure I'll remain to the long side on both these pairs.

[bigdog]

Here's another view on the GBPUSD. 4H shown below.

I am taking the 4H as my primary bias with the 60 SMA for a visual q. I have made the switch to a slightly longer view ( 1H to 4H) than my previous posts on this thread. Its taken me a few weeks to convert but I must say its a much more relaxing way to look at the markets.

My view is bias is still long.

To get me interested in short I would like to see price clear that horizontal line/zone on the 4H chart and then come back to re-test.