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I read somewhere on this site that technical analysis doesn't work for day traders. It sounds like most traders are having a hard time discerning what's important and what's fruitless with regards to intraday signals. I am starting this thread to cut through the clutter and tell you how the markets can be traded in ANY time frame.

 

In this lesson I will explain the two most elementary technical signals on the chart: price rejection and price acceptance. I'll bet that most traders have a hard time determining the general intraday trend and I believe this is due to your dependence on ultra short term charts, such as 1,2,3 or 5 minute charts. Moving out to 15 minute and 30 minute charts one can see things that are basically invisible on 1-5 minute charts. What I like to see on a 15 or 30 minute chart is a hammer or doji candlestick following a consolidation or range breakout.

 

What is the psychology behind the hammer? Price moved from the breakout zone to some new level. Then price then retraced towards the consolidation zone and was rejected (hammered) back into the direction of the new trend. The breakout of that hammer bar IS THE ABSOLUTE SAFEST BET YOU CAN MAKE!!! Why? Because if the market just got hammered away from a price level, what do you think the odds are that price will immediately return to that level? Not very good odds at all.

 

The doji is similar in nature because it still shows price rejection on a lesser scale, but also vividly displays the mini-consolidation which leads to a continuation move. And both breakouts CLEARLY DISPLAY WHERE TO PLACE YOUR PROTECTIVE STOP, at the other end of the hammer or doji bar following the breakout of that bar! Since the number one rule of trading is to always know your risk BEFORE you enter a trade, this is the best indicator in trading. (It doesn't hurt to have MACD confirming your trade direction, but it is not imperative). Just use the 20 period moving average as your trend filter and NEVER trade against the trend on the 15 minute chart.

 

Price acceptance is when the market moves to a price level that previously turned the market around but this time doesn't, thus indicating that the market may still go further in its present direction. This is most useful when the market is searching for support or resistance after a prolonged move and you are trying to decide whether to exit or add to your position. I'll leave trade management for another discussion.

 

Hope this helps!

 

 

Luv,

Phantom

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Hi,

 

I am a newbie. Please post a chart. This will help me immensely.

 

Thanks,

Prem

 


 

attachment.php?attachmentid=24590&stc=1&d=1305480204

 

 

This is the July Beans showing a perfect consolidation breakout followed by a hammer. Notice the "rattail" that helps identify the hammer. See if you can identify the other two hammers in this down move (both excellent places to pyramid your position).

 

This is only one of several breakout systems I developed and trade but I'm able to get in on several sustained breakouts each week with this method in just the currency futures alone.

 

Hope this helps.

 

 

Luv,

Phantom

5aa71077b616f_cbohammer.jpg.b643a137c1fd1fc40c6e902b13b36e9a.jpg

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  • How many trades are you making?
  • Can you post a couple of charts?
  • Are you exclusively trading just this pattern?
  • Are you exclusively trading candlestick patterns?

 

I promise to provide enough fodder to get you profitable if you aren't brain-dead, but I refuse to spoon feed you. Fair enough?

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How many trades are you making?

Can you post a couple of charts?

Are you exclusively trading just this pattern?

Are you exclusively trading candlestick patterns?

 

I promise to provide enough fodder to get you profitable if you aren't brain-dead, but I refuse to spoon feed you. Fair enough?

 

It's a deal. Thank you.

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Promising to "make" a person profitable is my opinion, a reliable sign of a scam...

 

I will leave the legal issues aside (there a couple that pertain but then it all depends on how much some poor person loses before they talk to an attorney).

 

Best of luck to all

 

Steve

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Well you can lead a horse to water but you can't make them drink. Of course it's not surprising horses are wary if 99% of pools are contaminated.

 

Having said that trading the first pull back after price has tipped it's hand and then 'confirms' through subsequent price rejection is a pretty firm strategy. Arguable you need to assume a bit more risk depending if you place the stop under the area that gave birth to the move or under the area that price was rejected (the hammer), I guess the latter keeps things tight.

 

It will be interesting to see where you go with this. There have been a couple of threads here that have shown a very similar approach in reasonable detail. The big thing they had going for them was that they showed trades before they trigger rather than in hindsight thus giving people confidence that the approach works in 'real time'. Still it's early days yet, so good luck with your thread :)

 

One thing you said Then price then retraced towards the consolidation zone and was rejected this is the key imho, leaning too heavily on specific patterns or candles ultimately will inhibit ones understanding of price action and the underlying supply and demand equation that causes the pattern/candle to manifest itself in the first place

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Promising to "make" a person profitable is my opinion, a reliable sign of a scam...

 

I promised to provide info (fodder) such that a previously clueless trader can get profitable; I never promised anyone profitability per se. That, of course, would be in violation of CFTC regs.

 

Please come here to learn, you're not invited if you're here to "stir the pot." Nes pas?

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attachment.php?attachmentid=24594&stc=1&d=1305550299

 

Let's take a look at another breakout. This one occurred last week in the euro.

 

What is striking here is how distinctive the post-breakout hammer was leading to a marked downswing.

 

These are the "picture perfect," ultra low risk type trades I love, for sure.

5aa71077cd42d_cbohammer.jpg.e872ca0baab7bee25572421a7f2df603.jpg

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One thing you said Then price then retraced towards the consolidation zone and was rejected this is the key imho, leaning too heavily on specific patterns or candles ultimately will inhibit ones understanding of price action and the underlying supply and demand equation that causes the pattern/candle to manifest itself in the first place

 

You are right on the money, BlowFish. UNDERSTANDING WHAT IS CAUSING THE PRICE ACTION TO OCCUR is paramount to trading effectively. I don't take any hammer the chart provides; its always contextual with regard to previous price action. This is exactly what makes this entry so strong: the market was range bound, it broke out, it tested, it failed the test with price rejection, it continued away from the consolidation zone.

 

Furthermore, depending on how much "potential energy" was built up and stored inside the consolidation range, these breakouts can give tremendous reward for every dollar risked. I'd rather be patient and attack these trades than fritter my capital away scalping 3 or 5 minute charts, but that's just me...

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attachment.php?attachmentid=24595&stc=1&d=1305563003

 

Using this chart of yet another euro breakout, allow me to instruct you on another form of price rejection, the false breakout-reversal.

 

Pay strict attention to the price action around the red arrow. Following a break below the 20 period moving average at around the 3:40 mark, the market moved into a sideways channel consolidation. The market moved up to a close near the high end of the channel range after peeking above the prior range high (the green bar just prior to the red down bar signified by the red arrow). The red bar moved all the way across the range and closed below the entire channel range. Following a short test, ie the "rattail" portion of the subsequent bar, the market plummeted. I sold the break of the arrowed bar with my risk stop one tick above that same bar.

 

Let's take a closer look at the market dynamics behind this form of price rejection. Prior to the breakdown the market tested the range high and even broke above the high. But the key element here is that the market did not FOLLOW THROUGH (false breakout). Instead, it moved all the way in a single bar through the trading range with a close outside the range on the other side (reversal). In other words, the market rejected the attempt to breakout on the high side of the range and opted to breakout strongly through the low side of the range. If the market doesn't meander back into the range and stay there any longer than it had to to complete the test (rattail portion of next bar) I am short this market!

 

I call the red-arrowed bar a volatility breakout bar due to its relative length with respect to the other bars in this consolidation. Also note that the MACD turned down with this vol breakout bar, confirming market direction and momentum.

 

This is a case whereby a hammer wasn't used to enter the market, but was replaced by a volatility breakout bar. In either case, price rejection was the "signal" used to enter the market relatively safely. Once again, the driving force behind the huge follow-through was the breakout of the much larger range that preceded the small consolidation breakout, providing enough "potential energy" to convert to the kinetic move you see at the right of the breakout bar.

 

That's the lesson for the day. Now go locate these opportunities for yourself and make some money!

 

 

Luv,

Phantom

fbor.jpg.64916a1550b0f7ebeec9ec99bf224003.jpg

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There's always someone that wants to stir the pot. I hope you won't be dissuaded from contributing to this site. Rational and logical strategies are always appreciated. And this talk about a scam is a bunch of crap. I didn't see anywhere, where you asked for money. This guy needs to go pee in somebody else's cereal. Thank you for taking the time to contribute.

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There's always someone that wants to stir the pot. I hope you won't be dissuaded from contributing to this site. Rational and logical strategies are always appreciated. And this talk about a scam is a bunch of crap. I didn't see anywhere, where you asked for money. This guy needs to go pee in somebody else's cereal. Thank you for taking the time to contribute.

 

You, and guys like you, are always welcome.

 

 

Luv,

Phantom

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hi Phantom,

 

I have just read your narrative with respect to your posted chart.

 

All very clear indeed to the point where even a person like I can follow and clearly understand

your thought process leading into your successful trade.

 

What I struggle with, is why you refer to Bolly Bands, 20 ema, MACD, Hammers etc,

when it is obvious that you can read price behaviour so clearly.

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attachment.php?attachmentid=24629&stc=1&d=1305651291

 

 

Here we go again!

 

Let's take a look at this morning's natural gas market.

 

The bar at 6 am tests the high from yesterday afternoon and forms a hammer. The market then traverses the entire channel range in a single bar and closes near the low. The next bar tests the 20 period moving average. The bar signaled by the red arrow breaks above the test bar high and reverses all the way to the low, signifying PRICE REJECTION (my favorite two words), closing on the low. At 7 am sharp the market plummets...

 

Anyone else make any money on this breakout?

 

Start tracking some of these setups and at the very least paper trade them!

(Your bank account will love you for it).

 

 

Luv,

Phantom

ngfbor.jpg.7c605ace91dac2d588a103e0f7839f0f.jpg

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What I struggle with, is why you refer to Bolly Bands, 20 ema, MACD, Hammers etc,

when it is obvious that you can read price behaviour so clearly.

 

My friend, All this "stuff" just acts like guard rails on a highway; these particular indicators have very special uses which I will most likely touch on at a later date.

 

 

Luv,

Phantom

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My friend, All this "stuff" just acts like guard rails on a highway; these particular indicators have very special uses which I will most likely touch on at a later date.

 

Luv,

Phantom

 

Excellent ... I knew you would have an appropriate answer ..."guard rails" is not a term

I am familiar with and so I will await your ongoing postings with anticipation.

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Hi Phantom,

 

Although I respect your willingness to share your knowledge and I think your advice is decent...please allow me to add a few thoughts on technical analysis for all struggling traders reading this thread and show these thoughts in a chart based on your EUR/USD example.

 

Phantom described his 'hammer trade setup' as the safest bet you can make. I am a '100% technical analysis' trader and one rule I have is to avoid betting. When I make a trade it is purely based on the information from a number of indicators that proved to be 100% reliable and accurate in all market conditions. Reliable indicators does not guarantee a winning trade but trusting your tools is step one before you can apply a single piece of technical analysis in real trading. I think that's crucial advice for (new) traders.

 

Please take a good look at the chart below. It contains the same data as the EUR/USD (20 min) example of Phantom and shows a number of the indicators I use. As you can see the vertical lines and yellow trendlines prove that all indicators confirm price action. No need to bet.

 

Technical analysis is a very powerful way to position yourself at the right side of the next price direction no matter the timeframe but only if your TA tools automatically adjust to the constant changing market reality. And you need to define a clear set of rules based on your TA tools that work both in trending and choppy price action.

 

Hope this helps a bit...

 

Good Trading!

 

 

 

5730361375_d655d0e870_m.jpg

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I may as well through my hat into the Ring.

 

I employ a few methods in my trading. as some may know, some methods work better during certain Market conditions and not as well in others.

 

One method that works consistently well for me, in just about all market conditions, Trading trend line to trend line. Just for the sake of giving it a name I call it the "Too Trendy".

( I am sure others do the exact same thing and call it something else ).

 

On the attached AUD/USD 1 hour chart there are 2 trend lines, The lower was drawn on the 1 hour, the higher was drawn on the 4 hour. When price reaches the lower trend line it will either be rejected, or go through. If price is rejected at the trend line, I might take a short scalp, depending on the R/R. I price goes up through the trend line ( remember to always wait for the candle to close on whatever TF you are looking at) I would buy, looking for a TP at the 4 hour trend line. Care should be taken when price approaches previous highs ( there are 3 on this chart).

 

The other MAs and indi's on this chart have no bearing on this setup, I was just too lazy too create a new chart.

Also, I am not following A/U at the moment, I just happened to have the chart open when I read this thread.

au1hr.thumb.gif.e24b6eb99570a2bb14de7fda03c4edc0.gif

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Phantom described his 'hammer trade setup' as the safest bet you can make. I am a '100% technical analysis' trader and one rule I have is to avoid betting. When I make a trade...[/img]

 

My friend, understand that I said bet, not uninformed gamble. Every single trade I make is a bet in the strictest sense but I NEVER make an uninformed gamble.

 

I think that you and I are on the same page here, just semantics...

 

 

Luv, Phantom

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Flex1975, the chart is too small (and can't be enlarged) to see what indicators you are using. Would you care to tell us what indicators and settings for each, you are using? And what time frame are you using? I would like to try to examine your use of these indicators and time frames, also. Thank you.

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Top marks to your coding skills Flex1975 ...but what does it all mean.

 

Hi Johnw,

 

Thanks for the compliment... Yes, I developed the indicators myself (and to avoid the thought I'm trying to promote them here on this forum....they are not for sale)

 

Í'll give you a brief description what the indicators measure:

 

- Trend Filters (slow/medium/fast): These filters classify each bar with a certain degree of tolerance and measure the related swing length.

 

- Trend Index: This is the leading indicator I use for entering a trade. It measures the trend quality based on a dynamic oscilator length.

 

- Market Heartbeat: This is my version of the ADX.

 

- Market Power: Shows the gear-box of the market (same as a car).

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This transpires because investors stock up on the asset towards the event. After the event, however, the price of the said asset drops significantly. This kind of activity has transpired frequently in the cryptocurrency space. One such occasion was the Bitcoin futures trading releases for the CBOE and CME. Just a few days to the CME’s release, the price of Bitcoin rallied from $6,400 and peaked close to its all-time high of $20,000 in a day. Not surprisingly, the price dropped considerably in the period that followed those releases. Furthermore, some cryptocurrency experts believe that the aftermath of the halving has already been priced in. It has been observed that demand is “missing” in the Bitcoin market, this could be a clear indication that the halving has been priced in. Usually, months before a halving, a boost in demand and price of Bitcoin is always noticeable. This time, however, no increase can be observed in neither of the stated areas. In this case, it could lead to a lateral trading period which might be a good thing for traders. At the moment, Bitcoin is still struggling to break above the $7,200 mark and there are no signs of a reversal happening soon. Whatever the result may be one thing is for sure, the price of Bitcoin is set to experience drastic changes this year.   Source: https://learn2.trade 
    • Your All-Round Guide To Security Token Offerings Security token offerings (STOs) are one of the most revered investment options in the crypto space at the moment. It has even been termed the “future of fundraising”. But what exactly are STOs and what is the rave all about? This article aims to break down STOs, what it is all about, and how it can be beneficial to you. What Exactly is a Security Token Offering? STOs, simply put, provide a means of tokenizing fungible financial assets such as stocks, bonds, and REITs, and introduces the tokens to the public through regulated channels. STOs are a lot like ICOs as they generally involve the same processes. However, the differentiating factor between STOs and ICOs is in the tokens being sold. With ICOs, the tokens are usually non-descriptive and could range from anything digital currencies to utility tokens. With STOs however, the token is a “security”, meaning that it is exchangeable and possesses a set monetary value. Breakdown of Security Tokens Security tokens function as digital versions of the assets they represent. Here’s a list of some popular security token representations: 1- Capital markets: Firms can convert their shares into tokens, allowing investors to own parts of the firm. In some cases, owners of tokens receive dividends and can execute votes on the affairs of the firm. 2- Equity funds: Equity funds can also tokenize their shares for sale. 3- Commodities: Commodities like gold, natural gas, coffee can be tokenized. 4- Real estate: The equity of this asset class can be tokenized, much like how REITs function. STOs do not change the underlying securities, instead, it makes these assets more readily accessible on a digital platform. Unlike other digital assets, security tokens can only be traded on certain regulated exchanges. Some exchanges require interested investors to meet some set qualifications. Advantages of STOs STOs are formulated with regulatory-compliance in mind, unlike ordinary token sales. Security tokens provide its owners with several legally binding rights. Some security tokens even bestow its owners with rights to dividends or other defined streams of income. Security tokens are also beneficial to their issuers. From the onset, the entities issuing the tokens are aware that their tokens are being purchased by accredited and verified investors and so, they don’t have to worry about the credibility of their investors. Other advantages of STOs include: 1- It is adequately regulated: Entities issuing security tokens must operate under the guidance of designated regulatory agencies in the region like SECs and FTCs. 2- You can rest assured that STOs won’t falter in the future: Unlike ICOs that cannot be guaranteed, STOs are sure to always deliver because it is properly regulated. 3- STOs offer great convenience: Procuring security tokens is easy, straightforward, and stress-free. All you need to do is to adhere to the STO requirement in your jurisdiction and you’re good to go. 4- It can be programmed: Security tokens are programmable and can be facilitated by smart contracts. 5- Automated dividend disbursement and voting: Some security tokens are structured to send dividends automatically through smart contracts. Also, some security tokens provide the bearer with exclusive voting rights in the affairs of the entity offering the tokens. 6- It is a globally accessible investment vehicle: Investors across the globe can procure security tokens regardless of their location. 7- It is not susceptible to manipulation: Considering the mode of operation STOs are run by, big players cannot manipulate its movements. 8- STOs are very liquid: It is a very promising investment option as it has an impressive liquidity quality and can be traded easily. With benefits like these, STOs are for sure transforming the fundamentals of the financial sphere. Disadvantages of STOs As with every other form of investment, security tokens has its limitations and shortcomings. Some of these limits are: 1- It is considerably more costly than utility tokens: STOs, unlike ICOs, hosts many organizations in their fundraising campaigns. Also, regulatory fees are not cheap which makes it more capital-intensive to host STOs. 2- Investor Qualifications: Countries like the US have certain qualifications an investor has to scale before becoming eligible to engage STOs. According to the SEC to be an “Accredited investor”, you must have an annual income rate of $200k and above or a minimum of $1 million in the bank. 3- Specific trading conditions: STOs can only be traded on certain designated exchanges. Also, these tokens are time-bound meaning that you are allowed to trade these tokens between investors for a set period after the STO. The Howey Test Usually, tokens are said to be securities, by law, when they pass certain thresholds. One such way to identify a security instrument is by applying the “Howey Test”. But first, let’s look at a piece of quick background information on how the Howey test came to be. In 1944, a citrus plantation called the Howey company of Florida leased out a large portion of its land to several investors in a bid to raise funds for much-needed developments. The buyers of the land were not skilled or versed in citrus farming in any way and decided instead to just be “speculators” and let the experts do their jobs. The lease was made on the premise that profits would be generated for the investors by the lessor. Not long after the business transaction the Howey company was sanctioned and accused by the United States SEC of failing to register the sale with the authority. The SEC maintained that the company was dealing with unregistered security. Howey denied the claims however, assuring that what it offered wasn’t a security. After much debate, the case ended up in the Supreme Court, which later ruled in favor of the SEC that Howey’s land leasing were undoubtedly securities. It remarked that investors were purchasing land mainly because they saw an opportunity to make a profit off the deal. Howey was then ordered to register the sale. This was the story of the enactment of the Howey test. Today, per the Howey test, anything is deemed to be a security if it satisfies the following criteria: 1- The investment included money. 2- The investment was made on an enterprise. 3- Profit will be made from the efforts of the providers of the investment. The Howey test has become a stronghold name in the crypto space. In 2017 and 2018 (during the “Heydey boom”), many ICO providers were completely consumed with scaling the Howey test as it was a major determinant used in ascertaining the legality of an ICO by the SEC. Failure to pass the test meant the offering was illegal and was sanctioned by the authorities. Some ICOs even advertised their tokens as investment instruments that had no value, describing their tokens as “utilities” used only for interactions on the platform. The Inception of STOs The very first STO was released by Blockchain Capital on the 10th of April 2017. The release pooled about $10 million in one day. Several STOs have been released following the first event including tZero, Sharespost, Aspen Coin, Quadrant Biosciences, and many more. STOs have since gained widespread acceptance and relevance in today’s market. Understanding the Distinction Between Security Tokens and Tokenized Security Confusing security token for tokenized securities is a common trap that people fall into. The main distinction between the two is that the former is usually a recently issued token that functions on a distributed ledger system while the latter is just a digital manifestation of pre-existing financial instruments. Apart from similarities in appearance and nomenclature, security tokens have absolutely nothing in common with tokenized securities. What Entities are Involved in an STO Issuance? Assuming a business entity plans on issuing security tokens as an embodiment of equity in its establishment, the next necessary step for that business would be to involve certain players and follow certain directives. It has to formally contact an issuance platform to serve as a medium for issuing the tokens. Popular issuance platforms include Polymath and Harbor, which consist of service providers like custodians, broker-dealers, and legal entities to carry out secure processes. Who Can Invest in STOs? STOs are available to the general public for the taking, regardless of location. However, as mentioned previously, the US has certain rules guiding STO investments. In the US, it is mandatory to be an “accredited investor” before you can invest in this instrument. An accredited investor is an individual with an annual cash flow of $200k and above for at least 2 years or a net worth of $1 million and above. More nations are starting to adopt the United States’ classification method and have begun restricting certain classes from investing in STOs. It is advisable to always research on the STO rules and regulations of the jurisdiction you’re planning on investing with. Final Word STOs provide businesses with the prospect of raising funds in an easy and regulated setting. It gives both investors and issuers a good deal of benefits, while also ensuring insurances against fraudulent or malicious practices, unlike ICOs. Issuers are not limited to any industry, they can vary from several sectors including real estate, VC firms, and small and medium enterprises. Moving forward, we will likely witness prominent firms venture into the STOs.   Source: https://learn2.trade 
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