Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

In this thread, Bearbull posted a neat little chart that is more appropriate here.

 

The premise is simple...

 

Experiment with say 15min or 30min chart and a EMA of 20 and focus on just two setups, a hammer in an uptrend at the moving average and a three bar reversal pattern (downbar, inside bar , followed by an upbar, ie. Harami setup, infact if you learn to blend them , you realise that the setup turns out to be a hammer

Similarly focus on an inverted hammer in a downtrending moving average

You could even try this out on 10min chart.

 

And the chart that followed the post:

 

attachment.php?attachmentid=7937&stc=1&d=1221450337

 

It's an interesting trading idea that I thought could get some life here. I'll invite Bearbull over to comment more.

 

A few charts that caught my attention using the same idea:

 

attachment.php?attachmentid=7933&stc=1&d=1221444977

 

 

attachment.php?attachmentid=7935&stc=1&d=1221445193

 

 

attachment.php?attachmentid=7936&stc=1&d=1221445396

 

* IMO the yellow highlighted one above would be the primo setup - a pullback to the 20 EMA after a move and an immediate rejection.

 

 

=================

 

Is there potential here for a very tradable system? Perhaps.

 

Items to consider:

 

* Entry is only part 1 of the equation, need an exit strategy.

* This may or may not be an all day trading system. There needs to be some movement for this to be viable IMO.

* Rules of entries could be flexible as some I have highlighted above or more strict like the one highlighted in yellow.

* Chart timeframe can make a big difference as well - minute chart, tick charts, volume charts - all could be viable options here.

5aa70e8811ac5_tles2.png.e5b2777569bffde039596ede5ff69a8d.png

5aa70e8816639_tles3.png.4b1593204ba611da41515ad7b30b6d95.png

5aa70e881bb50_tles4.png.6c5ceb79c13b683a0b2487c284cbf2dc.png

5aa70e881ed3e_tles1a.png.d388ebdfc2a9362b030d26ff58704a1a.png

Edited by brownsfan019

Share this post


Link to post
Share on other sites

You forget the other component of this popular set-up which is ADX>30.

When Dogpile was around, a lot of his set-ups were along this line.

Palin influence ? No, LBR influence, Trader with lipstick.;)

She also has a set-up called short-skirt which is also a pullback set-up similar to the one above. Hey she named it, I didn't.

Share this post


Link to post
Share on other sites

I frequently use the 21 EMA, which I won't lie I got from John Carter.

 

The biggest issues I can think of off the top of my head would be money management, exits, and even entries. You could use pulbacks, but that is often more difficult in real time then it appears in hindsight - but that could just be me.

 

Also, price will sometimes hang around and chop near the 20EMA. So money management would be key or you could get stopped out fairly easily. You could make a counter trend setup, for example a hammer that's "far away" from the EMA and make the 20 EMA your target.

 

Overall, I think using the 20EMA with a simple oscillator like a stochastic could be a simple strategy on say the 15 minute chart.

Share this post


Link to post
Share on other sites

It does not matter one iota which MA you use and who employed it first, the whole point is about concepts, to read the setup via candlestick pattern in terms of context.

One could draw a trendline or a moving average or both. Then wait patiently for the setups in an uptrend and vice versa, experiment with this, work out the risk/reward ratios, test it thoroughly, see if it gives a trader a consistently profitable approach, if not then by all means add ADX and so on. The primary message was to avoid attaching meaning to every hammer, engulfing bar , gravestone doji etc:)

However if anybody disagrees, fine, lets keep this civil and constructive, we know it is the most easiest thing in the world to criticize but then one should be prepared to post something which substantiates that and top it up with a positive contribution which will enhance the value of the thread and the forum.

Share this post


Link to post
Share on other sites

I'm a little annoyed BB. You and BF are giving away my trading method.

 

FWIW I got the 21 ema (and never forget the mystically effective 34 ema) from an old guy who got it from another guy who'd been trading the ema zone since Linda BR and John C were just twinkles in their parents eyes.

Share this post


Link to post
Share on other sites

Hey guys,

Thanks for participating. I will keep the thread clean and on point. Over here I can magically delete any posts that are off topic. ;)

 

The premise behind the trade plan is simple, yet will require work for anyone serious in using it. For me personally, I have found that EXITS are the most difficult thing for me. I have plenty of entry methods. When/where to exit is what can drive me nuts for days.

 

Feel free to post your own version of the EMA premise - 20, 21, 34, 28.627, I don't care. ;)

Share this post


Link to post
Share on other sites

Here's a failed one that just occurred:

 

attachment.php?attachmentid=7940&stc=1&d=1221483785

 

 

This one was a solid setup that just didn't work. Depending on how you entered the trade, about a 1.5-2pt loss. It appears that ones that work can move a substantial amount, so if the money management was good, no biggie on the loss.

 

It comes back to how you exit. You can lose 2 here if the winners are +4 or more for example. You can even get +2 if your winning % is over 50%.

 

So many ways to work the #'s and the system.

 

Maybe BB, Kiwi or Gsx can chime in and give some ideas on how you might exit trades using this setup.

5aa70e882a56d_tles6.png.150a47b5f55d6a51ed85d26387d7dc1b.png

Share this post


Link to post
Share on other sites

attachment.php?attachmentid=7946&stc=1&d=1221492190

 

 

Could be shaping up to be a thrust up, pause, repeat. I personally was long on a different setup and exited at 31.75. We'll see if this is one that just goes up all day or if some sort of exit/scaling was necessary.

 

If nothing else, 2 possible trades today on this setup and 1 loss, 1 winner. Winner greatly outperformed the loser and that's about all we can ask for.

5aa70e884409b_tles.png.bdecdc0c76f8c8aa66529a4645d79d49.png

Share this post


Link to post
Share on other sites

Here is something I frequently see. Two things typically happen, you get a good signal and price retraces to the 21 EMA. Or, price moves sideways until the EMA "catches up". So depending on your system, you can either get a trading signal or a signal that tells you to get ready.

 

attachment.php?attachmentid=7945&stc=1&d=1221492142

 

It's about to happen on the 5min right now, so we'll see how it plays out. I also threw in a basic stocastic, since I know that can be useful in trading. I would like to see the stocastic level out around or a little below. Couple that with support on the 21 EMA and you have a nice signal.

 

 

attachment.php?attachmentid=7947&stc=1&d=1221492335

emagap.jpg.10ac2c87ae57b3576049e75d4c12fbb7.jpg

emagap5min.jpg.ddfc6cee28296537637765e780f18d57.jpg

Share this post


Link to post
Share on other sites

BF,

The initial post was in response to RobinHood's inquiry as to the validity of employing candlestick charting on an intraday basis. As he had only used them on EOD analysis, the two simple setups i.e hammer and a 3bar reversal pattern in an uptrend via MA or trendline or both were pointed out as a starting phase to observe and acquire knowledge via research whether or not they provide acceptable level of predictability. The next phase would involve working out the tactics , i.e entry, exit, trading rules, money management etc , this depends entirely on the individual risk/reward tolerance but all this has to be worked out and tested and obviously requires considerable effort and patience as you already are aware I am sure. you might only get one or two setups a day, sometimes not at all, patience is not easy to implement.;)

 

Only after that one can proceed to introduce other tools such as blending of candles, pivots, support/resistance, vol etc. and again proceeded by thorough testing along each step of the way.

 

Also I would suggest to undertake the exercise initially on market hours price action only- pre market can be quite tricky especially just before the open where there is a tendency to move the prices the opposite direction to the true intentions.

 

In your chart you showed an entry at a doji, which was premarket and which reflects indecision compared to a hammer or a dragonfly. The second entry again is not a hammer in the strictest sense, large tail/small body, however if you blend that with the the second candle(the second arrow on the attached) then it is close to a true hammer, however that takes place in the 2nd stage of the exercise.

 

As to the entry/exit, this gets into the field of tactics and really there are numerous ways of managing a trade as in any other methodology.

for example: Entry could be on the close of the bar or the bar following the hammer if the close is above the high, here again should one wait for the close of the 2nd bar or should the entry be as the price moves up through the high of the hammer -- all of this has to be up to the individual and has to be tested out.

 

As for the exit: again it can be a fixed target or if trading say 2 contracts, take 1 off at a fixed target and trail the second (where and what distance - again tactics),

The first target can be the previous swing high (in case of a long trade and vice versa on a short), the second trailing under each bar that moves in the required direction, avoiding any inside bars or doji where it is likely to be hit and then the trader would be sitting there observing the price moving back up again:)

Moving of Stop: the initial stop would depend on the timeframe, here again so many ways of playing, the stop moved to breakeven after the price moves a certain distance etc.

 

As we are dealing with trend it is imperative to stay with one timeframe, later on if we get into playing support and resistance, then ofcourse it becomes a new ball game.

5aa70e8853dc9_NoentryonDoji.png.edb313d78a3534ad4c58d03913dd94a5.png

Share this post


Link to post
Share on other sites

Forgot the arrows.

 

Yes all the filtering process via other indicators such as ADX, stochastic RSI , CCI , multiple time frames etc comes later , however as I have mentioned my initial intention was to point out to Robinhood 2 simple setups to experiment with and test out.

5aa70e88595b4_NoentryonDoji.png.5a8a51d76d63b893fb470d274476d497.png

Share this post


Link to post
Share on other sites

That candle turned into a spinning top (if thats what you want to call it), from there the ES moved 10pts to 1230 a nice profit for sure. the real issue would be exits. On a volatile day like today, I would say 10pt move is reasonable for a 15 minute chart. But obviously, that's not very realistic for everyday scenarios.

 

Some possible ideas

 

1 - Use the stochastic, wait for an "oversold" signal with a small body candle

2 - Preset profit, i.e - 5pts.

3 - a % of the recent high. The previous high was 1240, the trade was around 1220 - so you could say a 50% retracement or 1230.

 

Any other thoughts? Something like this could turn out to be a simple trade to let play throughout the day.

 

attachment.php?attachmentid=7956&stc=1&d=1221495698

5aa70e88cea4c_emagap3.jpg.2bbb1b0aad1bd03bc2110d7a55d88d4c.jpg

Share this post


Link to post
Share on other sites
this depends entirely on the individual risk/reward tolerance but all this has to be worked out and tested and obviously requires considerable effort and patience as you already are aware I am sure. you might only get one or two setups a day, sometimes not at all, patience is not easy to implement.;)

 

That's probably the most important part of the entire process when using a setup that may not show up often. I'm glancing at the charts and other than that 1 long (or 2 if you take the one I looked at), that's about it for the day so far IMO.

 

1 or 2 trades and done or watching and waiting patiently.

 

My guess is some would struggle w/ that and want to trade even though the setups may be solid.

Share this post


Link to post
Share on other sites
That's probably the most important part of the entire process when using a setup that may not show up often. I'm glancing at the charts and other than that 1 long (or 2 if you take the one I looked at), that's about it for the day so far IMO.

 

1 or 2 trades and done or watching and waiting patiently.

 

My guess is some would struggle w/ that and want to trade even though the setups may be solid.

 

Precisely, that is where all that talk about discipline and consistency comes into play.

As per DbPhoenix's excellent definition of an Edge "An edge is the knowledge proved through research that a particular price pattern or market behavior offers an acceptable level of predictabiity and risk to reward to provid a consistently profitable outcome over time"

 

Once the strategy, tactics, trading and money management rules are in place, adherence to the trading plan based on that is of paramount importance if consistent success is desired.

 

Ofcourse there is also much merit in the Power of Quitting after a certain level of profit has been extracted or after a certain % loss, the river will be running tomorrow;)

Share this post


Link to post
Share on other sites

Believe it or not. Price action around 5-min and 15-min 20EMA and the Bollinger Band during early hours can be your clue to whether or we may have a Trend Day.

Share this post


Link to post
Share on other sites
Believe it or not. Price action around 5-min and 15-min 20EMA and the Bollinger Band during early hours can be your clue to whether or we may have a Trend Day.

 

I'd love to see a thread about that OAC!!! Feel free to start in the Candlestick Corner and I will make sure it stays on track.

Share this post


Link to post
Share on other sites
Here's one from today that I would consider:

 

attachment.php?attachmentid=7957&stc=1&d=1221504475

 

Yes indeed, with pivots (S2 at 1226), previous support , now resistance and the volume it becomes a high probability trade., emphasize probability, not certainty;), drill down to lower time frames and it gets better, but now we are getting far ahead of the initial exercise, wonder if Robinhood is paying any attention, afterall he started it all;)

5aa70e88d7368_Withpivotssupportandresistanceplusvolume.png.6d14f761f213d3497e89722096ccd6dc.png

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Topics

  • Posts

    • Date : 25th April 2018.

      MACRO EVENTS & NEWS OF 25th April 2018.



      FX News Today

      European Outlook: 10-year Bund yields are down -0.4 bp at 0.623% in early trade, the 2-year is down -0.5 bp at -0.5685. 10-year Treasury yields pierced the 3% mark overnight, but have fallen back slightly to currently 2.998%, while yields moved broadly higher in Asia with the 10-year JGB up 1.2 bp at 0.054%. Stock markets headed south in Asia, following a weak close in the U.S. with concerns about the earnings outlook amid warnings on profit outlooks hit sentiment. With a lack of key data releases in Europe today the focus is on the ECB meeting tomorrow, where Draghi will likely see through the recent run of weak confidence data to keep the ECB on course to end net asset purchases by the end of the year, but repeat once again that inflation is not yet on a sustainable path higher, which means the ECB is not ready to commit just yet.

      FX Update: USDJPY lifted back above 109.00 from yesterday’s correction low at 108.54, but has so far left yesterday’s 10-week peak at 109.20 untroubled. Ditto for EURJPY. Stock markets in Asia have been broadly lower following declines on Wall Street, with investors digesting higher yields — the 10-year T-note finally touched the 3.0% level (and first time here since early 2017) — and doubts about earnings growth. The USA500 closed out yesterday with a 1.3% loss, while the Nikkie 225 was showing a 0.3% loss in the late PM Tokyo session. This backdrop has likely curtailed yen selling, according to market narratives. In data, Japan’s February industry activity index came in with 0.4% m/m growth, slightly below the median forecast for 0.5%. USDJPY has been trending higher for a month now, from sub-105.00 levels. The dynamic has been concomitant with rising U.S. yields, with looser fiscal policy having given added underpinning to Fed tightening expectations. This comes with the BoJ continuing to peg JGB 10-year yields near 0.0%. Demand for foreign assets by Japanese life insurers has been a factor propping USDJPY up so far in the new fiscal year, while an abatement in concerns about trade tensions and cooling relations on the Korean peninsular have also been in the mix. Overall, we advise following the trend in USDJPY for now. Support comes in at 108.40-42.

      Charts of the Day



      Main Macro Events Today
        Credit Suisse Economic Expectations Crude Oil Inventories – Expectations – -2.043M Barrels from -1.1M last week BOC Gov Poloz & Wilkins speech – Poloz and Wilkins appear before the Senate Standing Committee on Banking, Trade and Commerce on Wednesday. Support & Resistance Levels



      Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

      Please note that times displayed based on local time zone and are from time of writing this report.

      Click HERE to access the full HotForex Economic calendar.

      Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

      Click HERE to READ more Market news. 


      Stuart Cowell
      Senior Market Analyst
      HotForex


      Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • $DXCM (DXCM) DexCom stock top of range breakout watch above 75.61,



      analysis http://chart.st/DXCM
       
    • Date : 24th April 2018.

      MACRO EVENTS & NEWS OF 24th April 2018.



      FX News Today

      European Outlook: Asian markets moved mostly higher overnight, following on from a positive session on Wall Street and amid ongoing USD strength with a weaker Yen underpinning a 0.75% rise in the Nikkei. The Hang Seng is up 0.94%, the CSI 300 rallied 1.75% amid speculation that the government is considering easing some policies put in to limit the credit boom. The absence of any negative news on the trade front seems to have given stock markets some breathing space and U.S. futures are also up in tandem with U.K. futures. Oil prices are also up and the front end Nymex future is trading at USD 69.14 per barrel. For now though bonds are getting a boost and stock markets are also higher, with most European futures posting gains in tandem with U.S. futures and after a positive session in Asia. Today’s calendar focuses on confidence data out of France, Germany and the U.K.. The U.K. also has public finance data and Germany auctions 2-year Schatz notes.

      FX Update: The dollar posted fresh highs against the euro and yen, and many other currencies after a bout of demand in Asia, which extending a broad rally the greenback has been seeing against for over a week now. The narrow trade-weighted USD index (DXY) posted its highest level since the first week of January, at 91.07. EURUSD logged a 10-week low at 1.2184, though euro demand has subsequently fuelled a rebound to the 1.2220 area. USDJPY lifted for a sixth consecutive session, making a 10-week high at 108.87. EURJPY is also firmer, though has so far remained below the two-month high it saw last week. The gains in USDJPY have been concomitant with the U.S. T-note yield nearing the 3.0% level, which has been generating headlines, which comes with the BoJ continuing to peg JGB 10-year yields near 0.0%. The Nikkei 225 closed 0.86% for the better, more than reversing the moderate loss seen yesterday. North Korea’s Kim said that he would be willing to accept IAEA inspections of nuclear facilities.

      Charts of the Day



      Main Macro Events Today
        German IFO – The German Ifo business confidence indicator, due Tuesday, comes in a new format this month, which includes the services sector now. For the new indicator a dip is expected to 102.8 from 103.2, and a decline in the expectations reading to 99.5 from 100.1 in the previous month. However, after the better than expected PMI readings there is a bias to the upside to the numbers. In any case, we don’t expect the April round of survey indicators to really change the outlook for the ECB, which is seen on hold this week, with officials seeing scope to leave the final decision on the future of the QE program open until July, when the risks to the global outlook may have become a bit clearer and the decision is becoming urgent. UK Public Borrowing – Expectations – at 1.6B pounds from -0.272B pounds last month. US Consumer confidence – likely declined to 126.0 in April, from March’s 127.7. US New home sales – expected to rise to 0.630 mln in April from 0.618 mln in February. Support & Resistance Levels



      Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

      Please note that times displayed based on local time zone and are from time of writing this report.

      Click HERE to access the full HotForex Economic calendar.

      Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

      Click HERE to READ more Market news. 


      Andria Pichidi
      Market Analyst
      HotForex


      Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Addendum:
      http://www.thedailybell.com/news-analysis/if-you-limit-any-free-speech-this-is-what-you-get/  
      ...
      Anar  Chicagoans, etc, etc, -  wake up !
      This -> https://www.mintpressnews.com/cheran-mexicos-indigenous-community-that-rebelled-against-narcos-thieves-and-politicians-and-won/240979/
      instead of this -> http://massprivatei.blogspot.com/2018/04/smart-city-projects-are-really-police.html
       
    • $WD (WD) Walker & Dunlop stock nice bull flag breakout watch,



      analysis http://chart.st/WD
       
×

Important Information

By using this site, you agree to our Terms of Use.