[Dogpile]

This thread is to chronicle a few set-ups... Comments welcome.

I use a combination of:
1) pattern recognition
2) market profile based 'value' concepts to filter trade ideas...

Set-Up 1:

Pattern: A-B-C Pattern

Filter:
If Current VWAP > Yesterdays Closing VWAP -- Look Long but only if ABC forms BELOW Todays VWAP Level
If Current VWAP < Yesterdays Closing VWAP -- Look Short but only if ABC forms ABOVE Todays VWAP Level

I am not going to spend time on exits as those are too complex...
Just Entries and Initial Stop Levels

http://bp2.blogger.com/_5h-SWVGx6Ms/...BC+Pattern.bmp

[Dogpile]

Ok, this one is a set-up for a 'coil break'.

Title: Bollinger Band Squeeze Play
(Lifted Partially From John Carters book 'Mastering The Trade')

Settings:
Use 15-min Chart
Both 2.0 Std Dev Bollinger Bands narrow to the point of being 'inside' the 1.5 Keltner Bands

Statistical Set-Up:
This set-up defines a market that is in tight 'balance' and poised to break hard in one direction or the other. A market 'in balance' is a market profile concept which means that buyers and sellers have agreed on the current price level. The Bollinger Band Squeeze play is when the market has become balanced for a period of time that is long enough such that a big move might be forthcoming. While the chance of a breakout to the upside or downside is considered to be 50/50 -- the reward of catching a directional move makes the trade have a high reward relative to the risk of 'stopping-out'. You must use a stop as the market can fake one way and then go the other way.

Pattern Filter:
You must be able to draw a well-defined Triangle (converging trendlines). If you can't draw a triangle, then the chart set-up is probably too wide-and-loose. This visual pattern is a crucial variable to the set-up.

http://bp3.blogger.com/_5h-SWVGx6Ms/...ueeze+Play.bmp

[Dogpile]

Notice the recurring 'Structure

[Dogpile]

Notice the 15-min 'Structure' which takes you out of the lower timeframe 'noise'.

There is generally support/resistance around the VWAP level. When VWAP is below previous day VWAP -- the odds are that the market will resume its trend back down. It is important to monitor the 're-testing' action after this signal -- if price does not break lower in convincing fashion, then its likely the 'down auction' is over and a new 'up auction' may begin. Thus the play is to short for the test down and then monitor how price responds.

http://bp2.blogger.com/_5h-SWVGx6Ms/...C+Patterns.bmp

[Dogpile]

Have been getting 1 of these per day lately...

http://bp2.blogger.com/_5h-SWVGx6Ms/...BC+Pattern.bmp

[bubba]

thanks Dogpile



same entry? buystop above last 2 bar high?

[Dogpile]

15-Min ABC-up forms pattern that sets up large move down....

just an awesome day today:

http://bp3.blogger.com/_5h-SWVGx6Ms/...BC+Pattern.bmp

[Dogpile]

<<same entry? buystop above last 2 bar high?>>

Hi Bubba,

I have played with lots of short-term entry techniques and currently have a few I select from. I try to find the one that seems to best capture the pattern I am trading but also has low risk... here is the one I used for that YM trade.

http://bp1.blogger.com/_5h-SWVGx6Ms/...rame+Entry.bmp

I like the '2-bar high' technique for NQ but not for YM. The focus of this thread is just to capture the higher timeframe pattern. The entry and stop technique you use are crucial for risk control but for me, these change over time depending on what is working and what isn't. If you are right on the pattern, it won't matter much what the lower timeframe entry technique you use -- but certainly, it is nice to get into a profit position soon after entering --- or take a small loss and look to re-enter.