The "False Break" Trade

[walterw 10]

This is a diferent version of the M`s that works very well on cycle days... similar to the Lazy Trade but its diference is that we need a swing of the previous pivot... probably from all my M`s this is an easier setup because you inevitably need a false swing to take the trade...

 

Its very important as all this countertrend cycle trades to be shure we dont have momentum in place, otherwise its a clear recipe to get stoped...

 

now when you have a :zzz: day then this "False Break" trades work like a charm...

 

So whats needed to trade this trade ?

 

1rst_ we want to have an outerband pivot being formed creating a level..

 

2nd_ we want to break that level, but not much...

 

3rd_ right after the break things loose steam and get back in... here we time our entry and expect to cycle back inside...

 

4th_ exits should be scalpers exits as we dont expect any super move...(we dont have momentum)

 

 

so I attach a chart of this, so you can understand what I am talking about here....

 

The advantage of this trade is that it gives you the posibilty to make very nice gains on this slow cycle days... its more easy to spot than the lazy trade because you need that swing for the setup...

 

For timing I am using all of the "flip" timing methodology with cci... in this case I do take the 100 levels cross for entries... setups are on 55Tick chart, "very specific timing" is in 22 Tick chart...

 

I will be posting this one for a while... and dont forget I am a scalper... cheers Walter.

[brownsfan019 17]

Walter - just one question for you - are you trading some, all, or none of these trade setups in real-time you have on the forum? Reason I ask is that we get a new Walter trade setup, which is great for newbies, but I am looking at some of these threads wondering how a scalper could possibly trade so many variations at the same time...

 

I'm just wondering how you decipher in real-time as a scalper the differences of the setups you have on the forum b/c it seems you have trend following setups, counter-trend setups, boring/zzzz day setups... And the setups have a lot of similarities, it's a matter of how the movement is interrupted.

 

Are you able to keep things simple as your sig says? If so, how?!?!? I've never had much luck with many variants of a trading plan, so I keep mine pretty simple with candlestick analysis. And to me, that's very cut and dry, not many variants there. I'd love to know how/if you are performing this analysis in real-time and how you decide what variant is being used in real-time.

 

Thanks Walter!

[Nick1984 10]

Hey Brown, in all of Walters set up posts I always read it as a sort of "variations on a theme" style where they are all more or less based on his original "flip" trade just tweeked for different market conditions. In all of his trade setups I have always assumed that these are taken well after the first 1-2 hours of the trading day because they seem to require a lot of analysis on what the market may do on that particular day, so I don't think that he actually incorporates all of these set ups on a daily basis.

 

After the first hour or two of the market opening, he spots the way the market seems to be moving and then applies the set up variation of the flip that suits that particular day best. If hes shooting for 10-20 points net a day then he can go in and out about 2-3 times a day with these set ups.

 

Thats how I've assumed Walter is operating but them I'm just speculating!

[walterw 10]

Walter - just one question for you - are you trading some, all, or none of these trade setups in real-time you have on the forum? Reason I ask is that we get a new Walter trade setup, which is great for newbies, but I am looking at some of these threads wondering how a scalper could possibly trade so many variations at the same time...

 

I'm just wondering how you decipher in real-time as a scalper the differences of the setups you have on the forum b/c it seems you have trend following setups, counter-trend setups, boring/zzzz day setups... And the setups have a lot of similarities, it's a matter of how the movement is interrupted.

 

Are you able to keep things simple as your sig says? If so, how?!?!? I've never had much luck with many variants of a trading plan, so I keep mine pretty simple with candlestick analysis. And to me, that's very cut and dry, not many variants there. I'd love to know how/if you are performing this analysis in real-time and how you decide what variant is being used in real-time.

 

Thanks Walter!

 

 

Hi Brown... nice question there...

 

I have decided some time ago to show all my arsenal, I wanted to take this out so I could also see from outside myself and maybe help others at the same time, in the process of showing all out, it hasnt been that organized... maybe as time passes I will be able to organize all this information... now remember there has been also some evolution from my part too, thats why its so mixed my information, because I went from my traditional M`s all the way to this new setups wich actually some of them are a new version of my M`s...

 

The First process here is determining the type of day, that normally can be established on first half hour... it will be Momentum day or Cycle day... so here you have two big classifications... where for each one there are a series of strategies that will fit the day...

 

If the day happens to be a Momentum Day.... then "flip" and "abc`s" will be considered..

 

If the day happens to be a Cycle day... then M`s trades will be considered and here we have the new M`s breed : "lazy" trades and "false brake" trades...

 

So basicly you have four setups that will be organized and considered depending in two types of market climate...

 

From this four setups I am more confortable with two of them "flip" and "false break"... maybe (here is my evolution) I will probably stay only with this two...

 

The nice thing here is that both use the same indicators on charts and the timing methodology (with cci) is common for both...

 

So depending on the day momentum or cycle I will be looking for "flips" or "false breaks"...

 

They are very easy setups to spot on a chart and very friendly to trade, the key is being good to determine market conditions...

 

Hope this may clarify all this Walter mambo :p cheers Walter.

[brownsfan019 17]

They are very easy setups to spot on a chart and very friendly to trade, the key is being good to determine market conditions...

 

And that my friend is what will determine if a trader is able to make money utilizing your setups. And an important consideration in my opinion.

 

Of course, the next question is - how do you determine the type of day we may have and how successful is that methodology in determining the type of day?

[walterw 10]

And that my friend is what will determine if a trader is able to make money utilizing your setups. And an important consideration in my opinion.

 

Of course, the next question is - how do you determine the type of day we may have and how successful is that methodology in determining the type of day?

 

Yes¡¡¡ and thats probably the most exciting issue a trader has to get good on, and I admit screen time is the best teacher here...

 

In my case I call it "Momentum vs Non Momentum conditions" and so far in my experience Keltner Bands combined with a discretionary perception of market "velocity" (stuck vs flowing trades) can help determining this market climate...

 

About Keltners the outerbands are the frontiers between this two conditions... if the market can manage with a nice "velocity" to build price action outside the outerbands, we can consider this a momentum condition... if the market gets to this outerband frontier and velocity is stuck there having a hard time to get any further then cycle is present and we can expect cycle conditions in the market... refreshing back to the mid band...

 

So in my case I perceive momentum vs non momentum with keltner and velocity (some kind of tape reading)...

 

There are some great amount of nuances to this...

for example a news day, you may have a very slow market previous to the news, after the news (depending what news and numbers) market changes to momentum...

 

On some other ocations like yesterday previous to a holiday,market was on cylce mode... Momentum trading days sometime happens after small range days and on and on this goes... lots of aspects to determine this "market climate" perception... I think here is where any newbie has to make screen time and get good on it... after that having a nice simple strategy for each market condition and you are mostly in bussiness... cheers Walter.

[walterw 10]

Are you experimenting something similar to this on a cycle Day ?

 

Well you should seriously consider trading "False Break" trades... they have a very nice performance on cycle conditions...

 

Here is an example today :

 

 

cheers Walter.

[moneymarkets 10]

Thanks for those good charts. Would you mind telling us what the settings for the Keltner Band and is normal CCI Settings also?

thanks

[walterw 10]

Hi Moneymarkets and welcome aboard ¡¡

 

The above chart is a YM 55 Tick with Keltner exponential bands 100/ 1 and 2.5 atr... cci is 14 and 6 (optional)... This charts are the same for : flip, false break and lazy trades (all in diferent threads)... hope helps... cheers Walter.

[pipper 10]

Hey Walter

 

I was just wondering what trading platform you are using in the screenshots above?..

I have also been playing with your setups on TS but find that the TS CCI isn't as nice as the one you show in the NT charts (fxst3 cci) from some of your more recent posts.

 

Anthony

[walterw 10]

Hey Walter

 

I was just wondering what trading platform you are using in the screenshots above?..

I have also been playing with your setups on TS but find that the TS CCI isn't as nice as the one you show in the NT charts (fxst3 cci) from some of your more recent posts.

 

Anthony

 

those charts where from trademaven platform, actually using NT for charting an yes fxt3cci its much smoother, thought this days I am timing on the price pane directly... cheers Walter.

[Patrycja 10]

Hi All,

 

Here is a high resolution printable picture of the Lazy and False Break setups.

 

Walter if you are reading this can you tell me do you have a classic M setup or do you use only these two to do your cyclic trading?

 

Patrycja

[walterw 10]

Excellent Patrycja ¡¡ yes thats the way it goes ¡¡ the other alternative that is very common, is the equal M... wich exactly tests the same level and comes back to the refresh action... good job... I imagine you are already making your sweet 10 ticks per day... keep up that great job Pat, trading can be such a great fun and profitable bussiness, it all depends on our mindset and our actitude towards life ¡¡ cheers Walter.

[walterw 10]

Sweet sweet M`s... cheers Walter.

[Patrycja 10]

Sweet sweet M`s... cheers Walter.

 

Hi Walter,

 

Thanks for these posts.

 

Yes like I said I cannot belive how fast a 22 tick chart is on a YM, just not for me at this stage. I now understand why you are using market orders to get in and out of the market.

 

I also had a look at your forex threads and downloaded the Metaquote software, did 12 pips yesterday, so I guess your methodology works.

 

Patrycja

[walterw 10]

Hi Walter,

 

Thanks for these posts.

 

Yes like I said I cannot belive how fast a 22 tick chart is on a YM, just not for me at this stage. I now understand why you are using market orders to get in and out of the market.

 

I also had a look at your forex threads and downloaded the Metaquote software, did 12 pips yesterday, so I guess your methodology works.

 

Patrycja

 

Yes, in terms of forex I am having a good deal of succes at this point... now I am not using metatrader charts, I am using Ninjatrader charts with Tick charts wich are very good... this method I am using has a very nice RRR embeded to it... unfortunately I can not talk to much about it here, as it forms part of a paid material... cheers Walter.

[Patrycja 10]

Hi Walter,

 

Thanks for your reply, I totally understand that you cannot talk something that it is a paid material.

 

I am more interested in the futures market than forex, they remind me of bucket shops of the 1900's if you read Jesses book you will know what I am talking about.

 

I have finished a new chart for all, to download and print. I have included all three setups for your counter trends there is also a cci entry chart.

 

Now tell me in one of your videos on the futures trading you had horizontal lines drawn from the old pivot points which you said that they are going to be used for the next day trading.

 

Can you post some of your setups using your futures templates with the horizontal lines together with your ABC, Lazy and Flips.

 

I would like to see how you combine all of these together in your trading style.

 

I thank you in advance.

 

Patrycja

Trading Setups Lazy Equals False Breaks.zip

[walterw 10]

Hi Walter,

 

Thanks for your reply, I totally understand that you cannot talk something that it is a paid material.

 

I am more interested in the futures market than forex, they remind me of bucket shops of the 1900's if you read Jesses book you will know what I am talking about.

 

I have finished a new chart for all, to download and print. I have included all three setups for your counter trends there is also a cci entry chart.

 

Now tell me in one of your videos on the futures trading you had horizontal lines drawn from the old pivot points which you said that they are going to be used for the next day trading.

 

Can you post some of your setups using your futures templates with the horizontal lines together with your ABC, Lazy and Flips.

 

I would like to see how you combine all of these together in your trading style.

 

I thank you in advance.

 

Patrycja

 

About Forex Brokers, not all of them are bucketshops.. you can perfectly trade forex in a professional way on the right place... I will try to post some trades... cheers Walter.

[Goldfish 10]

I think you can also determine whether its a trend day or a range day, by using the NR7 or Narrow Range 7 indicator.

 

I think NinjaTrader has it ...