5M Channel Scalping - 100pips \ week

[bbmac]

If channel is ascending I will take short pullbacks, and won't take long pullbacks as they are unreliable.
If channel is descending I will take short and long pullbacks.

So the answer is Yes and Yes.

Actually on reading your reply again, as I understand it, in a descending channel that suggests an overall downtrend you will consider a pullback entry to the lower or upper channel, ie if price breaks the lower channel it is in the direction of the descending channel and your pullback entry will be to short it (price action trigger provided) and you will also take a pullback to the upper channel of the descending channel if price breaks to the upside and pulls back (price action trigger provided to go long) even though that will be against the direction of the descending channel.

But with an ascending channel you will only consider what you describe as 'short pullbacks.' By this do you mean if price breaks below the lower channel of the ascending channel with a pullback to it you will go short with appropriate price action trigger, or the other way around?

Also, why does both ways prove unreliable in an ascending channel but not a descending channel? is it just something you have observed?

Thanks very much, your insights are very helpful.

 

[bbmac]

15min channel

I'm currently looking at this 15min gbpusd ascending channel...any thoughts appreciated

 

[Miki256]

bbmac:
I'll explain myself...

If an descending triangle breaks down I will take pullback to the lower trendline, and if it breaks up I will take pullbacks to the upper trendline.

However, I don't like to take long pullbacks that occur when ascending triangles break up. I didn't check it thoroughly and created statistics but judging by my intuition of the markets I won't take this sort of trade. If ascending triangles break down I will take the pullback to the lower trend line.

BTW:
Note that setup, occured today. It was 'legally' OK, but the Risk:Reward ratio was 1:1 and thus unsatisfying. I didn't enter. Another rule you should mind (in any system)...

 

[Miki256]

Hey bbmac. The channel in GBPUSD looks great.

But as a general rule I totally avoid trading the GBPUSD with chart patterns. I found out (And my mentor pointed out) that it doesn't respect the support and resistances like the 'normal' pairs.

Good luck at the trade, post updates.

 

[bbmac]

Hey bbmac. The channel in GBPUSD looks great.

But as a general rule I totally avoid trading the GBPUSD with chart patterns. I found out (And my mentor pointed out) that it doesn't respect the support and resistances like the 'normal' pairs.

Good luck at the trade, post updates.

Thanks for the explanations and advice. (I can't rep you as its say's I must spread the love first, lol !) By '..triangle' I take it you mean channel, ? thanks again.

 

[GCC]

Hi Miki,

I visited your blog and it is awesome. I found that you trade with higher timeframes with a method called BollBounce, and I am very interested in it. Can you tell us more about it? Which pairs do you find to be most profitable with this system?

GCC

 

[dollarhtay]

Hi,
it is an interesting setup. One question,
how to set the SL?
If channel height is for TP, then with R/R 1:2,
should SL be half the channel height?

 

[bbmac]

gbpusd 15min channel update

So, that gbpusd 15min channel, ...well it broke to the upside and a doji candle formed as price pulled back to test the broken upper ascending channel, - previous resistance-now potential support, but the potential set-up failed.

Miki256 did say he doesn't trade these channel patterns with cable and also that he doesn't consider pullbacks to the ascending upper channel following a topside break.

Intersting question now of course is that if it breaks the lower channel now and pulls back would that be considered an entry at potential resistance of lower ascending channel with a good price action trigger or does the break of the ascending upper channel -first, invalidate the channel period?

Thanks

 

[Miki256]

Thanks for the explanations and advice. (I can't rep you as its say's I must spread the love first, lol !) By '..triangle' I take it you mean channel, ? thanks again.

I always mean Channels.
Triangles are one of the worst chart patterns, very poor performance and rarely reach targets.
Thanks for the rep

Hi Miki,

I visited your blog and it is awesome. I found that you trade with higher timeframes with a method called BollBounce, and I am very interested in it. Can you tell us more about it? Which pairs do you find to be most profitable with this system?

GCC

Hey GCC,
I wrote an extensive guide to the system (the one you linked to).
Tell you more? Of course. It is a system based on moving-average retracements which is profitable main in 4H and 1H timeframes, in GBPJPY\EURUSD\GBPUSD. It may be profitable on more pairs though I didn't test it further. I focus primarily on the 5M Channel Trading nowadays so little time is left for trading the Bollbounce... It is simple, yet powerful. The main thing to remember is the demand for moving-average to be trendy, not flat. This is what makes the entries powerful.

You are welcome to share your experiences and trades in its Thread in 'Swing Strategies' .

Hi,
it is an interesting setup. One question,
how to set the SL?
If channel height is for TP, then with R/R 1:2,
should SL be half the channel height?

SL is determined when the signal is taken. When a signal occurs (candlestick signal - harami, hanging man, morning star etc. ) I will put my SL 2 pips above the high of the candle (for short), for 2 pips below the low of the candle (for longs).
I think it is crucial to put SL in points of Support and Resistance, no matter what system you trade. These are the most logical places to put SL in, because if it is touched - the basis for your position is gone.

Intersting question now of course is that if it breaks the lower channel now and pulls back would that be considered an entry at potential resistance of lower ascending channel with a good price action trigger or does the break of the ascending upper channel -first, invalidate the channel period?

Thanks

The failed breakout doesn't invalidate the pullback. These are highly probable trades. Unless the Support Trendline breaks down and than breaks up again, I would take the trade.
Get ready for pullback, I see that the GBPUSD has just broke the lower channel (along with another channel in EURUSD)

Update
EUR\USD Potential Trade:

Wait for pullback to occur, take profit = 60 pips.

GOOD LUCK EVERYBODY!

 

[bbmac]

Thanks Miki, I'm not convinced gbpusd has broken the 15min lower ascending channel yet so eurusd looks a better play if it sets-up.

Thanks again.

 

[bbmac]

eurusd

So here is your eurusd trigger re 15min ascending channel break?

G/L

 

[bbmac]

Whatever happsns, happens on this set-up above and it doesn't matter as it's just one in a larger sample that Miki256 has seen makes up a trading edge.

I attach the 1hr chart and highlight the potential support below the set-up, and ask the question - is this how you consider trade potential? ie calculate size of stop and whether you can achieve a sufficiently good r:r before it runs into potential support on the longer t/f?? Ie stop on this just above the 15min candle would have been 25-30pips and from the close of the 15min candle trigger and entry to market there was probably only a 1:1 risk:reward before the potential support on the longer t/f?

Thanks again

 

[bbmac]

gbpusd channel update

You can see from the pic that the channel did not break, making the eurusd a better set-up per the methodology kindly outlined here

 

[KillPhil08]

eurusd worked a treat 50 for 20 risk (my trades are always this ratio for some reason).
cable breaking now.

 

[bbmac]

eurusd worked a treat 50 for 20 risk (my trades are always this ratio for some reason).
cable breaking now.

Yeh, better set-up than gbpusd re this channel break methodology and arguably the candle shown in pic below was a better entry.

Well done Miki

 

[KillPhil08]

To be honest, I would never take a long off a broken uptrend channel unless it had some horizontal resistance too. It's far more likely to break back into the range - do you remember that 1hour channel we had after 1.35 was hit. It channeled for a week towards 1.50 always breaking the upside of it to trade back into it's previous range.

Trendbreaks are always better when the price is changing it's direction imo, all personal preference!

edit: found the pic, don't have the data of it breaking the channel but i'm pretty sure it did when approaching 1.50.

 

[Miki256]

Yep, anyone who took the trade made 70 pips (or 2.4%) in about an hour. That's +7.4% this week.

KillPhil08:
From my experience taking pullback shorts from ascending channels proven well-worth the risk.
But there are opinions as there are traders...

 

[bbmac]

To be honest, I would never take a long off a broken uptrend channel unless it had some horizontal resistance too. It's far more likely to break back into the range - do you remember that 1hour channel we had after 1.35 was hit. It channeled for a week towards 1.50 always breaking the upside of it to trade back into it's previous range.

Trendbreaks are always better when the price is changing it's direction imo, all personal preference!

edit: found the pic, don't have the data of it breaking the channel but i'm pretty sure it did when approaching 1.50.

Yeh, thanks for the observation, I do remember that. First pic below shows the perfect 15min thrust candle out of the 15min ascending channel in gbpusd and second pic below that is where gbpusd is finding resistance today (speaking of ascending channels) on the daily t/f.

15min thrust out of the 15min ascending channel;

Resistance and sell off today from current 4945 high is area of lower ascending channel, broken and re-tested on the daily

 

[bbmac]

eurusd-new channel?

Arguably a new, albeit narrow decsending channel has formed on eurusd 15min

 

[Miki256]

I think it is much too narrow - wouldn't take it.