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Showing results for tags 'envelopes'.
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Hi, This is a thread to share about the idea of "fresh, or first touch". Here are the basics. The first strategy is shown with the red triangles on the "10 pip 50 ma" chart. I use a 50 ema (magenta line) crossover. If a trend has been in progress and price has been separated from the 50ema for "a while", when price finally does cross the 50 ema by 10 to 12pips (EUR/USD); then I fade back to the 50ema. I want the touch and cross to be the first touch of the 50ema and a fresh one. I use an 18 pip stop or less. The stop is rarely hit, I avoid market openings. The trade does not come around too often (5 min bars), but it is a very sure trade. The yellow envelopes are 15 and 30 pips from the 50 ema (on VT trader). Dark blue is 250 ema. Another is similar strategy is shown on the other 5 minute chart by the white triangle. This is using the outer 50ema, 30 pip yellow bands envelope. After a long trend, wait for the price to finally first touch the 30 pip outer band opposite the trend direction. Then fade in the direction of the trend to the 14 ema (light blue line), or for a few contracts you can hold a runner to the 50 ema. The yellow block on the first chart shows another example of a near envelope touch that could have been taken. I use a 18 pip stop for this one also, but it is a high probability trade also. Of course if you want to tighten up your stops, you can wait for compound confirmations, like trend lines and so on. The idea of the thread is to invite others to add ideas that they are using on any kind of index, stock, or futures. Also since these are reversal strategies, note the conditions you avoid, like bb squeeze breakouts, triangle squeezes, market openings, etc. The idea is to have a few extra strategies that are high probability to be watching for, to trade more often. I will soon post a download with some coded alerts that I programmed for VT Trader, so you do not have to watch the chart for hours. It will be on the coding forum. I already have a paint bar alerts system I posted for Quotetracker. Then I would like to expand to useful observations. Something like, in a strong trend generally the price will bounce off the 14 ema 2-3 times before it retraces to the 50 ema. Or maybe after a squeeze breakout, at the first touch of the 50ema enter trade to continue with the trend, stop 15 pips. Another is to just use the 15 or 30 pip bands as a reversal guide in a sideways market, reversing to the 50ema. So I hope this is of interest to others, these observations can have been so useful in predicting profitable strategies.
