Cable Musings

[Anna-Maria]

Thought I'd kick off a fresh thread try keep some of these strat ramblings in one place. Don't want to disrupt Raul's specific 'breeze' comments or send other threads off on a tangent etc.

That way, folks can ask questions, comment & add their own bits & bobs to the content.

Was touching on a couple elements of this strat with torero & Soultrader earlier in the chat-room, & thought it might prove helpful to sling a chart up to better explain today's reasonings & subsequent postings.

Basically, I have very little clutter on the charts. Wherever possible, I look to run with the current flow - observing the 240 & 60m frames will offer me a heads up to the current scenario.

I'm only really interested in executing via the short-term momentum on this set-up, therefore I want to plot my overnight resistance/support lines (35&50% of the prev day's 5.00pm NY close), + the Asian high-low, which I determine from midnight London (19.00 EST) thru to the 8.00am (03.00 EST)London open.

I'm a discretionary price action trader - I don't observe indicators, system rules, EA parameters, mov avg crossovers or any other fancy nik nak's.

I plot horizontal s&r lines via the 240/60m frames & am aware of those timeframe scenario's: ie, whether Cable is forming lower tops/higher bottoms/ranging/trending/chanelling etc.

But primarily, I follow the candle/bar footprints. I want to see neutral-exhaustive behaviour @ resist-supp levels....I also prefer to witness price adhering to the short-term flow or trend.

I also prefer to execute this set-up during the London morning shift. I'll take price on at other times sure, but my most productive periods usually ensue on an Asian range bust of the early London flow.

I won't chase price on the back of a data release spike. If the Asian b/o is nudging close to an important UK data print, I'll let it go & attempt to pick it up via a pullback opportunity, providing it's running with the general flow.

Same consideration for Stateside data. I'm only concerned with sensible, reactionary behaviour....NFP or other Grade A spike material isn't part of my remit. I'll leave those knee-jerk gambling throws to others.

I use the % s&r levels as either exit points or paring opportunities. Stops are positioned above a prev high in a downtrend/low in an upkick. Once partial profits are removed, I'll hike the stops to b/e.

If price continues, I'll trail them to near term waves on the 15/5m charts or farther out to the hourly reference (if price really shifts).

As I said, I trade on a discretionary basis, experience & awareness of your instrument(s) is crucial taking this route, which will only develop over time.

I don't trade every day, neither do I take every single opportunity....each trade has to stack up on it's own merits!

If in the slightest doubt, I remain sidelined. There are plenty of opportunities to execute A Grade set-ups across the trading calendar month, the markets aint going anywhere - I'd much rather be "out wishing I was in, than in wishing I was out"

anyhow, once again, today offered up a pretty typical opportunity.......

short-term trend is down, lower tops on the 240/60, 9050 offering decent resistance ambling into London thus reflecting today's S2 zone.

price backed away from the Round Number (9110) edging into the London open, bracketing today's Asian range. It failed to take out the Asian top (9050) & popped thru the low on the back of the UK CPI print.

The trade is highlighted on the accomanying 5m chart, with supporting price aid info....the 2nd opp is also highlighted - again post-U.S data, making a bee-line for the earlier resistance zone, which reacted handsomely with my favored Fib number - the 78.6%, before falling away nicely to set up a further pullback shorting opp.

torero: hope this post further clarifies our brief conversation in the room!

[torero]

Simple! I love it! I told you your method had the style I wanted, simple with price action. We're going to be good friends, you and I.

I'll have to reread your post a few more time and see if I can set this up myself on my charts. Hope you won't mind the questions.

[Anna-Maria]

All, any questions/comments welcome.

Not much use posting commentary if it's not open to ineraction

I'll try post regular observations on here (both positive & negative) as triggers set-up, and time permitting, as close to live scenario's as possible.

[Soultrader]

Thanks texxas. I am starting to fall in love with your trading style. I am a strong advocate of keeping trading as simple as it can be.

I rely on price action: tape, market internals, pivots, and market profile. I use ZERO indicators on my tick chart. I absolutely hate indicators.

Keep us posted!

[Anna-Maria]

Thanks for the feedback fella's, glad to hear it strikes a chord

A little insight to what I plot on the larger timeframes. I won't post up the Weekly/Daily frames, as they're more or less self explanatory.

The main gist of those 2 big dogs are the main swing Fibs and/or bar behaviour which prints on them.

As with the smaller frames, I'm merely seeking some kind of confirmation of the current price action (trending/ranging/consolidating etc).

It's the lower 2 frames which I focus on more intently for this set-up play. I pitch up the 'obvious' horizontal s&r levels & then map the 240m swing Fibs to see how far or close they print in relation to any hard price based s&r levels.

If a confluence exists, all the better - if not, I'll merely observe the 5/15m price bars as they begin to threaten these area's....once again, I'll look to these zones for paring out partial positions and/or full exits.

The lines get updated as price meanders up & down the ladder. The only Fib levels I bother with are from the Daily/240m frames. I don't really consider anything lower than that on the Fib front.

[Anna-Maria]

ok, so we have tomorrows s&r levels from today's close:

R1=8983
R2=8996

S1=8920
S2=8907

We've travelled down 2c since Monday's open & approaching the 38% (8920)marker of the larger 240m swing from 8517-9180.

The S2 also coincides with the (1.89) Big Number, so should price get pressured toward this support zone, we might encounter some whippy activity?!

Will mosey in tomorrow morning & plot the Asian range barriers....see if anything likely sets up!

[torero]

I wanted to ask you if you use any correlation between pairs as part of your technique? Quite a few sites use this as basis for analysis. Although I've never used this in futures trading, not sure if this is an important factor in forex.

[torero]

2 more questions: since we're using GBPUSD as an example, why would the Asian hours H/L would be important? I understan EURJPY or USDJPY. Would NY H/L would be more important?

In reference to R1, R2, S1, S2, is Pivot point used at all?

[torero]

Here's the setup I have tonight with S1, R1, Asian H/L for EURUSD. Am I missing NY or London H/L, and Fibo lines here?

I take it that the congestion/support is located 1.2800 area? The next move down is 1.2777 (S1)? And up move is R1 or 50% fib retracement?

[Anna-Maria]

torero:

These are the brackets I have for the Euro.

I won't plot the Asian levels until Frankfurt opens at 02.00 EST (which it just has).

This will now give me the Asian H-L as: 2817-2799....kissing the R1-S1 % levels from last nights close.

Remember though, I don't trade Euro on momentum plays - it's too cumbersome & lacks the speed/agility of Cable.

Euro is more suited to swing plays (for my purposes anyway).