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Hi Chaps
Some time ago I took 3 months off from trading, no charts, no books, no trading . Essentially I needed a break, I had learned a lot but had
failed to put together what I knew, in a consistent trading plan and trade execution.
Over a month ago I started to read trading books , I was looking for powerfull entry reversal signals. I came to realize that 2-3 day signals where more
powerfull than a one day pin bar for example. I am keen on bullish/bearinsh engulfing patterns and morning and evening 3 day reversal patterns.
However using pro real time to find these signals , I soon came to realize that there was an abundance of these, and that they where not all
born equal. Most charts where a mess no clear trend Bullish signals at the top of a daily swing high, etc.
I made a few mistakes in my analysis I, I identified a great bullish engulfing on a bullish DAILY chart showing swing Low ,High Hl HH then a pull back what I had
failed to appreciate was the bigger picture the bearish swing patterns on the WEEKLY TIME FRAME. Putting things into perspective the daily move was merely a pull back
on the WEEKLY down trend . So the real market was Bearish not bullish according to the daily pattern. Of course when the daily price hits the WEEKLY trend line or
a weekly S&R zone price then resumes its down trend.
What I came to realize was that the :
No 1 priority is to identify the underlying trend for your time frame mine is EOD as it is this momentum that will make the difference
beween a depleting acc and a swelling acc. This done by marking the weekly swing 3 bar reversal HHs HLs or LLs LHs. as the case may be, then picking the
ones that have a decent price difference between the HHs or LLs. Check the angle of the trend 45 degrees is ok and the percentage gain/decrease of
price from the start of the movement to the end in case of only a few swings. Avoid shallow angled trends.
No 2 priority A reaction/bounce at a KEY WEEKLY support and res zone with mutiple hits. Weekly is the higher time frame as I am looking for a daily signal.
No 3 Confuence of a Monthly Pivot Point/ and or monthly buy/sell zone and or fib level at this weekly S&R Zone.
No 4 The quality of the actual reversal signal, bar combo.
No 5 Was the bounce off or over trend line
I am not suggesting that I have discovered any thing new, Its a matter of putting things into perspective
and realizing what matters most.
This is all work in progress I am learning like you to hone my trading skills seeing what works and what does not.
No doubt failed and winning trades will arise from great set ups and poor alike,
I wellcome all comments
For Example as a minimum to trade Longs I would accept a L followed by a H followed by a HL followed by a HH, I would trade the pull back at the 50% or 62% fib To Key weekly R&S and ideally prev HH. I would want to trade from a minimum of a daily rejection or reversal candle but better still a 2 day bullish signal like a Bullish engulfing, indicating rejection at a place of WEEKLY MULTIPLE R&S . I want to see a decent price change between The H and HH and L and HL. The ideal pattern is L, H, HL, HH, HL, HH, and a bullish signal at KEY WEEKLY S&R and idealy at the same level as the prev HH or at. In addition confluence of a monthly pivot point and or fib level and weekly S&R
A short would be a weekly H, L, LH, LL, LH, LL, then a pull back to KEY Weekly S&R level, complete with a multiple bearish reversal pattern or decent pin bar or gapped up decent sized bearish candle. And confluence off a monthly pivotpoint and or fib level.
.. Alternatively an established trend with muliple HH HLs etc.
You will see charts of real trades with the above marked weekly swings and a short summery of
the reason for the trade confluence etc.
Regards
Mark
Some time ago I took 3 months off from trading, no charts, no books, no trading . Essentially I needed a break, I had learned a lot but had
failed to put together what I knew, in a consistent trading plan and trade execution.
Over a month ago I started to read trading books , I was looking for powerfull entry reversal signals. I came to realize that 2-3 day signals where more
powerfull than a one day pin bar for example. I am keen on bullish/bearinsh engulfing patterns and morning and evening 3 day reversal patterns.
However using pro real time to find these signals , I soon came to realize that there was an abundance of these, and that they where not all
born equal. Most charts where a mess no clear trend Bullish signals at the top of a daily swing high, etc.
I made a few mistakes in my analysis I, I identified a great bullish engulfing on a bullish DAILY chart showing swing Low ,High Hl HH then a pull back what I had
failed to appreciate was the bigger picture the bearish swing patterns on the WEEKLY TIME FRAME. Putting things into perspective the daily move was merely a pull back
on the WEEKLY down trend . So the real market was Bearish not bullish according to the daily pattern. Of course when the daily price hits the WEEKLY trend line or
a weekly S&R zone price then resumes its down trend.
What I came to realize was that the :
No 1 priority is to identify the underlying trend for your time frame mine is EOD as it is this momentum that will make the difference
beween a depleting acc and a swelling acc. This done by marking the weekly swing 3 bar reversal HHs HLs or LLs LHs. as the case may be, then picking the
ones that have a decent price difference between the HHs or LLs. Check the angle of the trend 45 degrees is ok and the percentage gain/decrease of
price from the start of the movement to the end in case of only a few swings. Avoid shallow angled trends.
No 2 priority A reaction/bounce at a KEY WEEKLY support and res zone with mutiple hits. Weekly is the higher time frame as I am looking for a daily signal.
No 3 Confuence of a Monthly Pivot Point/ and or monthly buy/sell zone and or fib level at this weekly S&R Zone.
No 4 The quality of the actual reversal signal, bar combo.
No 5 Was the bounce off or over trend line
I am not suggesting that I have discovered any thing new, Its a matter of putting things into perspective
and realizing what matters most.
This is all work in progress I am learning like you to hone my trading skills seeing what works and what does not.
No doubt failed and winning trades will arise from great set ups and poor alike,
I wellcome all comments
For Example as a minimum to trade Longs I would accept a L followed by a H followed by a HL followed by a HH, I would trade the pull back at the 50% or 62% fib To Key weekly R&S and ideally prev HH. I would want to trade from a minimum of a daily rejection or reversal candle but better still a 2 day bullish signal like a Bullish engulfing, indicating rejection at a place of WEEKLY MULTIPLE R&S . I want to see a decent price change between The H and HH and L and HL. The ideal pattern is L, H, HL, HH, HL, HH, and a bullish signal at KEY WEEKLY S&R and idealy at the same level as the prev HH or at. In addition confluence of a monthly pivot point and or fib level and weekly S&R
A short would be a weekly H, L, LH, LL, LH, LL, then a pull back to KEY Weekly S&R level, complete with a multiple bearish reversal pattern or decent pin bar or gapped up decent sized bearish candle. And confluence off a monthly pivotpoint and or fib level.
.. Alternatively an established trend with muliple HH HLs etc.
You will see charts of real trades with the above marked weekly swings and a short summery of
the reason for the trade confluence etc.
Regards
Mark
Last edited by matk on Sun Sep 19, 2010 12:43 pm; edited 1 time in total
