Joey's MP Journal

This is a discussion on Joey's MP Journal within the Trading Journals forums, part of the Reception category; The first alert is the failed aution through the Feb 8th highs after a decent move up. There is also ...

Closed Thread
 
LinkBack Thread Tools Search this Thread
Old Feb 15, 2009, 5:00pm   #169
Joined Mar 2005
ES 10th Feb Example

Joey25 started this thread The first alert is the failed aution through the Feb 8th highs after a decent move up.

There is also a small value area of only about 6pts, which in the context of recent market activity is very small. The market could well be ready for a directional move.

At this point we take our vol readings, average range numbers or ATR measurement to gain an estimate for expected range. Some people extend yesterday's range, but I think this can lack ambition since the best moves come after a sudden contraction in range (signifying indecision).

The 20-day ATR on the chart is about 30 pts.
Attached Thumbnails
potentialreversal.jpg  
Joey25 is offline  
Old Feb 15, 2009, 5:16pm   #170
Joined Mar 2005
10th Feb Example Continued

Joey25 started this thread The market opens at 8:30am (14:30pm GMT) below the value area.

A market opening out of balance offers both great risk and great reward.

The strategy is to have 2 sell limit orders, one at the Value Area Low and one at the Point of Control.

In this example, the market reverses exactly at the Point of Control.

Our target is measured from the intraday high, so can be trailed towards us if the market rises further before falling.

Stops and trailing are a personal thing, but I will tend to cancel the Point of Control order if the market reverses straight away from the Value Area Low and a swing high forms before the other order is hit.
Attached Thumbnails
entriesandexits.jpg  
Joey25 is offline  
Old Feb 17, 2009, 6:39pm   #171
Joined Mar 2005
Cable Balance Areas

Joey25 started this thread Cable Balance Areas for use 18th Feb

Balance Area 1

Upper Edge = 1.4501
Mean = 1.4388
Lower Edge = 1.4344

Balance Area 2

Upper Edge = 1.4280
Mean = 1.4242
Lower Edge = 1.4210

I'm particularly focussing on the lower edge of the upper balance area (1.4344), which is just below last week's untested close.
Attached Thumbnails
cablebalance.gif  
Joey25 is offline  
Old Feb 17, 2009, 9:14pm   #172
 
Vaco's Avatar
Joined Apr 2004
newbie question,

How do you calculate your balance areas?
Vaco is offline  
Old Feb 17, 2009, 9:48pm   #173
Joined Mar 2005
Joey25 started this thread
Quote:
Originally Posted by Elefteros View Post
newbie question,

How do you calculate your balance areas?
The first step is to identify the places with the highest frequency of candles - in this case 60-minute for GBPUSD.

Then you can use your own arbitrary rules for the edges, such as >= 3 overlapping candles or >= 4 overlapping candles, so that you exclude areas which lack development.

Another alternative is as per the spreadsheet I have attached in post #2 of this thread.

The areas should really stand out when you compress the chart. The drill to go through is to let your eyes rotate from the bottom of areas of congestion to the top and then back down again. Then move to the right and see if the same rotation occurs later on.

In the above chart, if you do that on the 12th and then move rightwards, hopefully you can see the market "rotating" through the same zone. What has happened is that the upper balance area has been rejected and the market is naturally finding balance in the previous area - it is rare for it to pass straight through the lower one again without a pause for breath .

Last edited by Joey25; Feb 17, 2009 at 9:53pm.
Joey25 is offline  
Old Feb 18, 2009, 10:58am   #174
Joined Mar 2005
Joey25 started this thread Following on from post #171, I entered the following orders:

Sell limit @ 1.4272 (Top of Lower Balance Area)
Sell limit @ 1.4336 (Bottom of Upper Balance Area)

I've subsequently been filled on the first order and the market has travelled entirely through the lower balance area.

If, as appears likely, the H4 candle closes below this balance area, I will cancel the pending order and place a stop above the top of the lower balance area.

The theory behind this is that the market may retrace and test the lower edge and even the mean again, but if it gets as far as the upper edge then something has changed and the short is no longer valid.

Otherwise, run until close.
Attached Thumbnails
stoptrail.gif  
Joey25 is offline  
Old Feb 18, 2009, 3:03pm   #175
Joined Mar 2005
Joey25 started this thread Update

In the next H4 candle, price has retraced to both the lower edge and the mean (see post #174), but then stalled.

The stop remains intact, and price is trading below the Lower Balance Area again.
Attached Thumbnails
update.gif  
Joey25 is offline  
Closed Thread

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
say hello to my little journal gozinsky Trading Journals 13 Sep 27, 2011 9:37pm
LBranjord journal lbranjord Trading Journals 8 Jul 10, 2008 8:06pm
My forex Journal honasona Trading Journals 1 Jul 26, 2007 10:02pm
YM journal frugi Trading Journals 297 Mar 30, 2007 12:12am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)