Technical Templates

[speedbump]

This is a potentially whippy range as price didn't really follow through on the drop away from that lower high yesterday.
The cycle has already saved me from a false breakout this morning & it looks like a thin start to the day, with not much in the way of sell stops underneath the range low for now.

You & kip were correct today strobe, it's a nervy, choppy session & there's no wind in the sails at all.

The essential requirement when triggering these types of entries out of shorter timeframes with intraday objectives is momentum.
If there's no wind in the sails then it's time to get out & wait for another opportunity to engage.

If we were triggering this type of approach (high/low, lower high) via a slightly longer timeframe (60/240m for instance), then we can afford to hang around & wait for the price action to get a little backwind, but the longer you wait when trading via a faster, intraday view the higher the risks of getting chopped up.

Since the day's open, price has barely covered 40% of its average one month range, & we're already into the New York session.
It's also been more than 2.5 hours since my entry & there's still no backwind.

Experience tells me (as I'm sure it does the others here) that unless we get an immediate shift in momentum right off the bat, the opportunity risks increase & odds of a successful outcome diminish.

Time to leg out, keep my powder dry & come back when the conditions are more favourable.

[visualxray]

The essential requirement when triggering these types of entries out of shorter timeframes with intraday objectives is momentum.
If there's no wind in the sails then it's time to get out & wait for another opportunity to engage.
Since the day's open, price has barely covered 40% of its average one month range, & we're already into the New York session.
It's also been more than 2.5 hours since my entry & there's still no backwind.

Time to leg out, keep my powder dry & come back when the conditions are more favourable.

You were correct to scratch that trade when you did, because even though prices have subsequently moved down in the direction you guys were prepared for, you would have been stopped out before it broke down during this last descent.

It's quite impressive to witness how you guys manage your entries & the corresponding price action. Hindsight is a great thing, but unfortunately we don't get paid for hindsight trades. Scratching and/or constantly assessing trades when the conditions aren't condusive is a smart play & will reward you going forward, especially when trading fast paced moves out of shorter timeframes. The fact you use a dual-timeframe approach does you a lot of favours & is a good, common sense ploy.

I don't know how long most of you have been trading, but you all appear to possess a very good understanding of current & forward pricing motion, evidenced by the many accurate levels you highlight on your charts.
And as another example of that understanding, just look where price bounced on this last leg down

[speedbump]

You were correct to scratch that trade when you did, because even though prices have subsequently moved down in the direction you guys were prepared for, you would have been stopped out before it broke down during this last descent.

You're right, I would have. And as you say, decisions have to be made in the moment & based on price action playing out at the hard right edge.
The information & advice these guys dispense make these types of decisions a lot easier to execute because it's proven to work on a consistent basis.

It's quite impressive to witness how you guys manage your entries & the corresponding price action.
I don't know how long most of you have been trading, but you all appear to possess a very good understanding of current & forward pricing motion, evidenced by the many accurate levels you highlight on your charts.

We have excellent tutors
It helps that the concept & structure is based on pure common sense.
You don't need a whole bunch of multi confirmers to begin constructing & establishing a position.
The primary focus is on quickly & effortlessly identifying directional bias & when/where to begin preparing a bet.
And from there you simply bring your trigger/s into play, compute the positive risk/cost variable & get in.

I've only been trading forex (& also live) for 6 months. I first encountered this approach via their thread on Babypips back in March whilst browsing another simple, logical trend based approach (3 Ducks). The two are very similar in structure & I was immediately attracted.

Just as you have found, the more I read the more I liked, & the beauty is you don't need to plough through mountains of complex rubbish, burning months of valuable time to get the meat & gravy of the approach/set ups.
Personally, I've found it pretty straightforward to assimilate & replicate.
I was so pleased when I located a link to this thread. A lot of the regulars left that place & re-surfaced here.
Registering here was easily the best decision I've made.

And as another example of that understanding, just look where price bounced on this last leg down

Yeah, it's a little galling to see it drop down smack bang into a common support zone that kipper referenced earlier.
Still, you have to shrug your shoulders, acknowledge you got the background spot on & simply accept that sometimes the market doesn't play ball as you want.
They'll be plenty more that we do tag!!

[Joe Whitehorse]

When prices are in bid mode or demand based (trading from the long side) it will be supported on pullbacks which do not violate the prior higher low.
When prices are in offer mode or supply based (trading from the short side) it will be supported on pullbacks which do not violate the prior lower high.

That simple & logical sequence is all the background information you need in order to begin preparing to engage with the market either on an intraday basis or via a slightly more medium term objective.

When we left the EUR/USD chart last last Wednesday prices were up at 3124 & the violation point at the 3080 higher low level had been identified.
If the higher low sequence was to be maintained then that zone would have to be bid on any deflation from the higher high close.

Well, we can clearly see that the following day revealed the tale of the tape & prices consolidated that area, but more importantly, failed to gun higher & break the top beyond the 3140 level. The guys quite rightly bid prices up off the 3080 supports seeking a continuation move through the highs & when it failed to materialize, cut it off at the knee's and/or booked profits.

kipper then correctly identified the bias play prior to friday's session & we can see the resulting price action journey on the hourly chart since my last post.
Quite often (as has been refrenced many times before within the thread) the transition from one bias to another can cause whippy, erratic price action as stops, contrary orders & fresh bets work their way into the system & get aggregated. But if you see an opportunity to play & you can calibrate acceptable risk, the choice is yours (depending on your risk attitude/style etc) to engage with the market via your preferred timeframe(s).

Just be a bit more observant with your bets & if in doubt, scratch or re-evaluate intra-session to ensure you're not pushing your risk boundaries.
The sequence of the price cycle can be tracked pretty clearly & effortlessly as it flipped from long to short by identifying the failure to print a fresh high & the establishing behavior of the corresponding lower high pattern.
It's the same process each & every day.
You identify the cycle phases, plot the violation areas & bet according to the signals you receive via your lower timeframe secondary charts until you either get stopped out or voluntarily close out the deal.

In order for price to begin flipping back to a long bias, it has to print a higher low above 3033 & offer a hook up off 20 and/or a 1-2-3 reversal pattern on your 5 and/or 15min charts.
For continuation shorts, you're looking for the same types of signals, with price failing to take out 3033 & moving down (& pulling back) through friday's lows.

[Joe Whitehorse]

We've said it can be replicated across any pair or instrument & as long as you know where the prior violation area is, you know what needs to happen to keep the current pattern valid.

Rather than choose a 'best fit' sceanrio, lets take a look at one that's not so cut & dried.
If your experience levels are low & you're trying to find your feet trading via this type of approach, then your best bet is to locate & identify pairs displaying a smooth, less volatile personality, to offer yourself a high degree of potential probability.

You can also use the 60SMA as an additional heads up to current & forward momentum possibility by observing the directional slope in relation to the price action on your primary timeframe chart.
If it's flat-lining & price is criss-crossing the average you might want to hang fire, wait until it offers a clearer view and/or scroll to other pairs to get a better reading.

But it doesn't prevent you from being able to track & identify the cycles & the decision points that reflect a potential flip in the directional bias.

USD/CAD is a good current example of a less straightforward pair to attempt that exercise on.
Working from last Tuesday we pick it up falling away from the .9800 level & violating the higher low (HL) sequence.
It pops up on that extended bearish candle on the 15th, prints a lower high but fails to print a lower low (LL).
It then proceeds to track a higher low (HL) cycle until it violates the sequence next day on a close below 0.9860.

You can then follow the sequence through until friday's close where we now know that the 0.9920 higher low (HL) zone needs to support this pair if a long intraday bias bet is to be executed.

I would suggest you practice laying out your primary chart map this way & establish prior to the next day/week open the levels required to maintain the dominant bias as well as the violation zones that will render the pair neutral.
This exercise will enhance your intraday decision making & shine a spotlight on the areas to focus attention on going forward.

[wratten25a]

For months, as an unregistered lurker I’ve been reaping the benefits of the great information posted here. Today I decided to register so I could thank all the contributors for generously taking their time posting on this incredibly valuable thread.

I guess it was a bunch of months back when I found this thread by way of the Tech Templates thread at babypips. My nick over there is d-pip and I believe I’ve met a few of you on Andy Perry’s 3 ducks thread.

I trade alone and sometime when I’m in a slump my confidence waivers, doubt creeps in and I’ll start questioning my methods and ability to trade. When that happens I find it so valuable to be able to come back to this “no BS” thread and use it as a refresher course.

I always leave with renewed confidence and understanding in the straightforward concepts repeatedly demonstrated on this thread.

Again, thank you all for generously taking your time to post such valuable information.

[Carll]

I guess it was a bunch of months back when I found this thread by way of the Tech Templates thread at babypips. My nick over there is d-pip and I believe I’ve met a few of you on Andy Perry’s 3 ducks thread.

Hello d-pip
I've read your contributions many times when browsing Andy's & Tess' threads before I left there. Welcome to FSR, it's very nice to see you here!
Yeah, most of the newer (+ a couple of the older) contributors found their way over here after catcher posted the link.
It's like breathing in fresh air for a change
It was becoming rather claustrophobic & noisy over there with everyone pounding their chests & stroking their ego's.
I'm informed it resembles a cross between a kiddies playground & a Sat night bar-room brawl over there these days.
We're glad to be shot of it to be honest.

I trade alone and sometime when I’m in a slump my confidence waivers, doubt creeps in and I’ll start questioning my methods and ability to trade. When that happens I find it so valuable to be able to come back to this “no BS” thread and use it as a refresher course.
I always leave with renewed confidence and understanding in the straightforward concepts repeatedly demonstrated on this thread.

That's great to hear & something that will make Tess, Jos & the guys smile!!
As you've witnessed the past 2 to 3 years, the market pulse changes....but the framework laid down on TT (& the structure that Andy advises) affords you the flexibility & knowledge to change along with it.

Price action (whether it's influenced by automated or non-automated means) is orchestrated & driven by humans.
They program the objectives, delivery & end result by referencing levels & zones that can be tracked & plotted by you & me.
What we need in order to achieve that aim is a simple, effective method of identification, preparation & execution....& the less complex, the better.

As you (& the others who have followed the advice laid down by Tess, Jimmy, Joe et al) have discovered over the years, the minimilist approach & their logical reference tools work....not only do they work, they operate extremely efficiently choose whatever rhythm or pulse the market is currently operating under, & that is the measure of a successful model.

Great to see you're still around d-pip & look forward to interacting with you in a different (but more pleasant & professional) environment

[round number]

Well, we can clearly see that the following day revealed the tale of the tape & prices consolidated that area, but more importantly, failed to gun higher & break the top beyond the 3140 level. The guys quite rightly bid prices up off the 3080 supports seeking a continuation move through the highs & when it failed to materialize, cut it off at the knee's and/or booked profits.

The sequence of the price cycle can be tracked pretty clearly & effortlessly as it flipped from long to short by identifying the failure to print a fresh high & the establishing behavior of the corresponding lower high pattern.
It's the same process each & every day.
You identify the cycle phases, plot the violation areas & bet according to the signals you receive via your lower timeframe secondary charts until you either get stopped out or voluntarily close out the deal.

Very much the same story again today on this pair Joe.

Price moved up through 3033 with higher closing lows on the hourly until it was violated late yesterday (circled) into the New York close.
Today's Asian session failed to take out yesterday's highs & formed a lower high during it's own trading session ahead of the european open.


Intra-day traders especially can now pick up 5 minute chart pullback (123) shorts into the early european action via the cycle bias change from the hourly chart & continue to view that bias until a change/violation in the 60 minute chart technicals.

[visualxray]

Intra-day traders especially can now pick up 5 minute chart pullback (123) shorts into the early european action via the cycle bias change from the hourly chart & continue to view that bias until a change/violation in the 60 minute chart technicals.

And presumably, those same intraday traders can use the cycle failures on the 5 minute chart as partial or full exits if the momentum suggests the initial move is temporarily exhausting.

[round number]

That's how I'm interpreting & viewing it yes.
The usual options exist when entering & managing a position, which are obviously dependent upon the individuals risk attitude & trade objectives at entry, but a strong close & push back up beyond 1.3030 is needed to hold this mornings bearish flows. There are quite clearly bids in evidence here back towards Friday's low & Monday's open, & if they're not sufficiently strong to encourage price back up the ladder, the market will attempt to see how much sell stop activity resides underneath the aforementioned level.

That then exposes the the 1.2900-2920 area.