Comprehensive Trading System/Methodology

[bbmac]

2nd) Would it be necessary to plot the 5 mins Support and resistance as they will be repeated in the 1 hours support and resistance plotting too?

Just read your question again and will answer that part of it specifically below;

There may be times when 5min (intermediate t/f) potential supp/res isn't obvious on the 1hr chart (proxy for 30min trend t/f in so far as pot supp/res/sbr/rbs is concerned)....generally though you would prefer to see trend t/f pot supp/res in order to trade against a trend....but in rangy conditions you may only be able to identify 5min pot supp/res at which to act on a 1min (trigger t/f) reversal set-up

There will be times in a trend that potential sbr/rbs is identifiable on the 5min chart and not on the 1hr, it is these zones where a 1min trigger t/f Re-entry set-up may develop...into the 5min / 5min + trend. These intermediate t/f pot sbr/rbs zones will in all probability not be visible on the trend t/f and they result in generally shallower pullbacks in a trend, than say a 1hr potential sbr/rbs zone at which you would identify an intermediate t/f Re-entry set-up (entry timed as a trigger t/f Reversal set-up.)

So I would advise identifying potential supp/res/sbr/rbs on both the intermediate and trend t/f's, particularly if you want to take advantage of the trigger t/f Re-entrys and the trigger t/f Reversals in rangy conditions.

Hope this helps,

 

[babymush]

BB

I would like to check as I can see that you are quite confident trading Reversal Extremes as you will go in Maximum lots with this setup.

However, I do not have such skills in trading this setup and I always get in too early and get stopped out. Please advice if I did anything wrongly or if there is any where I can improve on this setup.

 

[babymush]

Wow you use 6 screens or moniters

The way I choose to lay out my trading set-up is 6 screens, reading left to right...

Screen 6...30min/1hr main charts, minimised newsfeed on sound alart
Screen 5...Fibs
Screen 4...1hr potential supp/res/sbr/rbs zones (horizontal lines plotted, as well as T/lines,) Dealing platform (minimised until in a trade) Dealing ticket always on show.
Screen 3...1min Main chart
Screen 2...5min Main chart
Screen 1...15min Main chart

2 of the 6 screens (Screens 5 and 4)are therefore effectively dedicated to 3 out of the 4 main potential supp/res factors (Previous swing hi/lo zones, fibs, t/lines.)

The 1min main chart contains the Daily pivots, the 5min containing the Weekly and the 15min the Monthly, these pivots being minor potential supp/res/sbr/rbs factors. The touted bids/offers are obtained by sound alert from the newsfeed/rss.

 

[bbmac]

BB

I would like to check as I can see that you are quite confident trading Reversal Extremes as you will go in Maximum lots with this setup.

However, I do not have such skills in trading this setup and I always get in too early and get stopped out. Please advice if I did anything wrongly or if there is any where I can improve on this setup.

I've looked at that Rev Extr you traded and would comment as below;

The cci hook was not inside it's bol at open of the first reversal candle and neither was there one of the exceptions to this (that oftentimes occur together,) namely i. whole reversal candle closing outside 20bol, ii. local divergence in the cci)

Always difficult to say in retrospect, but I doubt I'd have been motivated to trade that one in realtime, for the reasons given. As for potential Support, yes I see the previous 1hr swing lo's = previous support=potential support that you were looking at, but no 5min main chart supporting set-up against some obvious selling pressure.

Might be worth remembering that re previous price swing hi/lo zones acting as potential supp/res/sbr/rbs... the most local/immediate ones will oftentimes be the strongest as represent most local price action, such as where price actually did find support in your example.

Maybe limit yourself to the 'perfect' Rev Extremes as decsribed above another eg of which is shown above, an example of which is below, and ensure it has at least divergence in the next t/f (5min) oscillators for added tech confluence.

Note in the 'perfect' Rev Extr below how the cci was hooked back inside bol at open of the first reversal candle..the trigger.

 

[bbmac]

BB

I would like to check as I can see that you are quite confident trading Reversal Extremes as you will go in Maximum lots with this setup.

However, I do not have such skills in trading this setup and I always get in too early and get stopped out. Please advice if I did anything wrongly or if there is any where I can improve on this setup.

Re point above, Screenshot below shows the potential support at which you acted as well as the more immediate potential support to your then current price action

As I am not trading till N/Y I am not up to speed with what other potential supporrt factors fell in either of the previous swing lo zones shown, so don't know whether there was any other support confluence.

When trading counter-trend you really have to be sure of your set-up, supporting set-ups and potential supp/res...This confidence will develop over time.

 

[babymush]

Hi

Would just like to confirm what you meant by the CCI hooking back in at the first reversal candle. I really want to be sure about this setup.

Should my setup at that point of time be considered as hooking back in at the first reversal candle or why is it partially as you said?

Thank you

 

[babymush]

BB... I would like to improve my identification of Potential Support and Resistance points. Do you have any guides on it that you can send or could you kindly take some time to do some charts of the potential Support and Resistance, RBS, SBR points that you have marked out so I can see your concept of finding these points?

Thank you so much as I know that you are busy with you own trading too.

 

[bbmac]

Hi

Would just like to confirm what you meant by the CCI hooking back in at the first reversal candle. I really want to be sure about this setup.

Should my setup at that point of time be considered as hooking back in at the first reversal candle or why is it partially as you said?

Reversal Extreme

A Reversal Extreme (Rev Extr) set-up exhibits the following;
* Well diverged 4 bol flip (10/20/40/60-ascending/descending order in bearish/bullish set-ups.)
* CCi hooked back into it’s own bol from an extreme reading at the Open of the trigger reversal candle. (see Note i)
* Osma and Macd at extreme readings
* Price breeches the 61.8 Support/Resistance Channel as a minimum.

Note i.
The rule of thumb in respect of the trigger reversal candle (re individual Price Action Analysis) is that the CCi hook should be back inside the bol at the Open of the first real reversal candle…The exception is a. when there is local divergence in the CCi and/or b. a whole reversal candle closes outside the 20bol. (Very often a. and b. can occur together.)

The example below shows a 'perfect example when the cci is hooked back inside bol at open of first reversal candle. Coincidentally a whole reversal candle closes outside the 20bol in this example (doji.)

Another example of a 'perfect' Reversal extreme is shown below

You have to be watching the set-up develop to know whether the cci was hooked inside the bol at the open of the first reversal candle - this candle formation providing the actual trigger for entry within the set-up.

Now look at an example that exhibits both of the 2 exceptions referred to above '...a. when there is local divergence in the CCi and/or b. a whole reversal candle closes outside the 20bol. (Very often a. and b. can occur together.)

And now an example where just exception a occurs;

As with all Reversal set-ups they are best acted upon at pre-identified pot supp/res/sbr/rbs with a supporting set-up on at least next t/f and/or supporting conditions on the optional small charts.

 

[bbmac]

BB... I would like to improve my identification of Potential Support and Resistance points. Do you have any guides on it that you can send or could you kindly take some time to do some charts of the potential Support and Resistance, RBS, SBR points that you have marked out so I can see your concept of finding these points?

Thank you so much as I know that you are busy with you own trading too.

Happy to help.

As you know the system/methodology involves identifying 4 main factors that may cause support/resistance/sbr/rbs (1. previous obvious swing hi/lo areas, 2. fibs, 3. touted bids/offers, 4. t/lines...[pivots being the minor factor])

Primarily these factors are led by the obvious previous price swing hi/lo zones on the trend and intermediate t/f's and these are used as the building block in determining potential supp/res/sbr/rbs. Where no such obvious previous swing hi/lo zone exists it is the other 3 main factors we look to.

In identifying such a previous price swing hi/lo zone remember to look for any confluence within it re the other potential supp/res factors and remember too that price does tend to test toward the/the extreme of the zone, and is more influenced by the near term most immediate/recent previous price swing hi/lo's on any gven chart. (These last 2 points are generalisations but important ones, and do provide good rules of thumb.)

When you buy at potential supp/rbs or sell at potential res/sbr, always be asking yourself why? In other word try to determine where the most volume/market partticipants will enter the market and why?? it tends to be where there is most technical and supp/res confluence at the most pronounced/obvious previous price swing hi/lo zones that may act as potential res/rbs / supp/sbr respectively,...not the minor ones.
I have attached a zip file of some actual random examples of potebntial supp/res/sbr/rbs at which I acted which I hope may help to give you more insight.

Hope this helps.

 

[babymush]

Thank you for your detailed explanation.

Where do you place your stop in this case? at the swing High/low of the rev extreme?

Thank you
By the way, what is the main difference between the small charts and the normal? Have never used the small charts before

 

[bbmac]

a. Where do you place your stop in this case? at the swing High/low of the rev extreme?

b. By the way, what is the main difference between the small charts and the normal? Have never used the small charts before

a. Yes outside of the reversal candle which provided the trigger to entry, keeping it as tight as possible (without being impossibly tight)...these set-ups imply extreme o/b or o/s conditions on the chart they set-up on so a quick reaction is expected and of course with confirming divergence /extreme reversal set-up on the enxt t/f, so much the better.

b. The small charts use fib tunnels and fib channels and are another way of guauging o/b or o/s conditions....they are useful secondary technical confluence if for eg you have a good 1min main chart trigger set-up but an imperfect or no 5min main chart set-up...see the section in the Part I doc attached on post 74 [page 10,] that discusses them with examples of the optimum conditions to look out for.

 

[babymush]

I just entered a trade and would like to seek your advice on where I should place my initial stop

 

[bbmac]

I just entered a trade and would like to seek your advice on where I should place my initial stop

I see the 1min Rev Aii set-up and the 5min Re-ent 2 supporting set-up, but am not getting the potential sbr on 1hr at which you entered the set-up?? If I were in this trade I would be thinking of moving my stop toward b/e . The 5min re-ent 2 occurred at a HH after 2 x HL on that t/f so not an optimum place for the re-ent set-up to present itself at.

Generally though your stop should ideally be outside of the pot supp/res/sbr/rbs at which you acted, trailing it in tighter as the trade progresses, as discussed on another post earlier in this thread.

 

[babymush]

I got stopped out of that trade again what did I do wrong ...

EDIT:

I was looking at the 5 mins charts for potential SBR ... Maybe I got it all wrong about the SBR thing ...

When do you look at 5 mins charts to determine support?

Is the area I circled potential SBR?

 

[bbmac]

re post above, if you look on 30min trend t/f, there has also been a HL

 

[bbmac]

I got stopped out of that trade again what did I do wrong ...

1. There was no pre-identifiable potential sbr on 1hr
2. The supporting Re-ent set-up came at a HH on the 5min after 2 x HL's not the optimum LH (or a H) on that t/f
3. The re-entry to 30min+ down trend occurred after an obvious HL on that t/f.

 

[bbmac]

Do not be fooled into acting at every set-up unless you have readily identified potential supp/res/sbr/rbs...Remember you should know in advance where you are going to look for a set-up (an then a price action trigger at the set-up) by pre-identifying the potential supp/res/sbr/rbs on trend and intermediate t/f's, ....not see-ing a set-up and then trying to identify pot supp/res/sbr/rbs...be led by the supp/res not by the set-ups.

This is very important.

 

[bbmac]

You can see the 1min Rev Aii at 0809am gmt at potential res zone on 1hr...5min confirm was still a Re-ent 2...starnge as not at pot sbr, but pot res on the trend t/f...still a fair entry at potential res with 1 and 5min small charts supporting, 5min in an uptrend now though.

Will catch u later. G/L

 

[bbmac]

EDIT:

I was looking at the 5 mins charts for potential SBR ... Maybe I got it all wrong about the SBR thing ...

When do you look at 5 mins charts to determine support?

Is the area I circled potential SBR?

You cannot enter on a 5min Re-entry set-up at 5min potential sbr...it has to be on the enxt t/f up...ie the 30min trend t/f sbr...you would only enter a 1min re-ent set-up at 5min sbr/rbs

The areas you circled is congestion not sbr/rbs and although congestion can act as potential supp/res/sbr/rbs you traded using a 5min Re-ent 2 suppoirting set-up at an area where there was no identifiable sbr on the next t/f up, at a HH on that t/f and after a HL on the trend t/f....yoiu could have scalped a few pips off the 1min set-up using the 5min congestion as potential resistance I guess.

 

[bbmac]

Potential sbr zone is comprised of a previous swing lo zone (better with confluence of other factors too such as bids/offers, fibs, t/lines, [pivots])

Potential sbr (and rbs) should be identified on the t/f above that that the re-entry set-up appears on, into whose trend (+) a Re-entry set-up indicates a potential re-entry after a pullback.