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The difference with this one was the consolidation zone which happened just before ... in my opinion the rapid retraces back from far away tend to bounce more... Also - look for key fib retracement zones or any other s-r zones to support the trade.

 

Nice work.

 

Whatever works for you! Share some charts so others know what you are talking about!

 

:)

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believe it or not this is really close to the first profitable strategy that i traded. it was the one i was using when the marriage went to hell in a hand basket, and my mind just was not in it.

 

at the time here is what i was using.

 

i used a 21-EMA instead of a 20.

then i plotted a short-term support/resistance channel.

 

Support = 3- SMA (Highs) - ATR(5)

Resistance = 3-SMA (Lows) + ATR(5)

 

wait for a period that trades inside the channel.

 

Resistance line below 21-EMA, sell Support

Support line above 21-EMA, buy Resistance

 

you guys can figure out/play with the rest of it.

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Funnily enough it's almost identical to the first strategy I ever traded. In those days (pre first big drawdown) I traded without emotional clutter and with a great deal of simplicity. Funnily enough in many ways I think my trading was at its best then. The results where pretty damn good too. I am not sure exactly went wrong partly 'grailittis' partly lack of discipline. Certainly wasn't anything wrong with the method though being a newb at the time that was the first thing that was messed with.

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believe it or not this is really close to the first profitable strategy that i traded. it was the one i was using when the marriage went to hell in a hand basket, and my mind just was not in it.

 

at the time here is what i was using.

 

i used a 21-EMA instead of a 20.

then i plotted a short-term support/resistance channel.

 

Support = 3- SMA (Highs) - ATR(5)

Resistance = 3-SMA (Lows) + ATR(5)

 

wait for a period that trades inside the channel.

 

Resistance line below 21-EMA, sell Support

Support line above 21-EMA, buy Resistance

 

you guys can figure out/play with the rest of it.

 

Could you put up some charts and illustrate, it will lot easier that way.

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Bootstrap,

 

What do you mean by Support = 3- SMA (Highs) - ATR(5)

Resistance = 3-SMA (Lows) + ATR(5)? Can you please post a chart with your indicators? I tend to understand stuff related to trading better when I see a chart. Thank you.

 

believe it or not this is really close to the first profitable strategy that i traded. it was the one i was using when the marriage went to hell in a hand basket, and my mind just was not in it.

 

at the time here is what i was using.

 

i used a 21-EMA instead of a 20.

then i plotted a short-term support/resistance channel.

 

Support = 3- SMA (Highs) - ATR(5)

Resistance = 3-SMA (Lows) + ATR(5)

 

wait for a period that trades inside the channel.

 

Resistance line below 21-EMA, sell Support

Support line above 21-EMA, buy Resistance

 

you guys can figure out/play with the rest of it.

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Today I had another very good example as, especially in trending days, candlestick combined EMA20 and other stuffs can be very profitable...in many different markets.

Below the Eurostoxx 50, as you can see for all the morning the 20EMA (in the charts you can see it with the 2std Bollinger Bands) has been a perfect support. The first 2 trades are, from my point of view, a very nice combination of many useful stuffs I found here in TL and around.

The retracements find in fact a support both on the 20EMA and on the last high swing (something similar to what Walter here on TL call the "Flip Trade")..there is so a confluence of supports in that area. From a candlestick point of view approacching those supports the bodies of the candles (and also the ranges) start to be very smaller and, as also mentioned here in the candlestick corner (sorry I tried to find out the thread - from James_GSX as far as I can remember- but I was not successful)that can be a powerful signal the trend is going to resume. I normally consider these candles as a small congestion and play the game at the breakout of the high with a stop placed 2 tick below the bottom of the range.

 

http://www.traderslaboratory.com/forums/attachment.php?attachmentid=8528&stc=1&d=1225826704

 

I have also added a third red row. This was a great trade I didnt manage to be successfull with as I moved my stop to break-even too early :crap:. In these case the support was done by the previous S/R and met at that point the lower Bolling Band with a series of "hammers". I have personally started to use Bollinger Bands from few months as I have seen that in Europe they are quite used and provide quite good reference point both on trend conditions and range conditions. I am now combining them with candlestick...maybe soon, when I will feel a bit more confortable about the topic, I can start a thread on this.

 

Thanks to All..

 

Fedeo

5MIN_ESTX50.thumb.jpg.3586a20c7389ce1e2432b7fd087f3544.jpg

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tried to post this but it looks like it didn't work..I try again....

 

Today I had another very good example as, especially in trending days, candlestick combined EMA20 and other stuffs can be very profitable...in many different markets.

Below the Eurostoxx 50, as you can see for all the morning the 20EMA (in the charts you can see it with the 2std Bollinger Bands) has been a perfect support. The first 2 trades are, from my point of view, a very nice combination of many useful stuffs I found here in TL and around.

The retracements find in fact a support both on the 20EMA and on the last high swing (something similar to what Walter here on TL call the "Flip Trade")..there is so a confluence of supports in that area. From a candlestick point of view approacching those supports the bodies of the candles (and also the ranges) start to be very smaller and, as also mentioned here in the candlestick corner (sorry I tried to find out the thread - from James_GSX as far as I can remember- but I was not successful)that can be a powerful signal the trend is going to resume. I normally consider these candles as a small congestion and play the game at the breakout of the high with a stop placed 2 tick below the bottom of the range.

 

attachment.php?attachmentid=8529&stc=1&d=1225827255

 

I have also added a third red row. This was a great trade I didnt manage to be successfull with as I moved my stop to break-even too early :crap:. In these case the support was done by the previous S/R and met at that point the lower Bolling Band with a series of "hammers". I have personally started to use Bollinger Bands from few months as I have seen that in Europe they are quite used and provide quite good reference point both on trend conditions and range conditions. I am now combining them with candlestick...maybe soon, when I will feel a bit more confortable about the topic, I can start a thread on this.

 

Thanks to All..

 

Fedeo

5MIN_ESTX50.thumb.jpg.9810f59340324b35c00177cc570998bf.jpg

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Fedo, good trades. You got 2 out of 3, and those 2 winners look pretty good IMO. In that little clusterf**k area I probably would have screwed up and tried entering twice before you did. You could have set your stop a little further below that support line, 2 ticks is asking to get stopped out though - at least on the ES. But you would have needed to be patient if you wanted to catch that big trend. You didn't know that trend was coming, so it would have been a difficult trade for me to hold onto.

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Hi James,

thanks. Well regarding the third trade in "normal condition" i would have probably also tried to enter the hammer at 15:00, basically I didnt cos 15:00 is 9:00 NY time and I have decided to avoid to enter all the markets between 14:15 - 15:15 (8:15-9:15 NY) as volatility increase too much for me and market can go crazy (especially in these last months). I know that lots of "great" trader manage to do their days mainly in the 1 hour of trading but unfortunately I am too far from them......maybe one day....let's say in this case it saved me....:).

Regarding the stop let's say that's the case where you follow exactly your plan...you are proud you did.....but inside your stomach everything is moving :angry:....

 

 

Ciao

 

Fedeo

Edited by Fedeo
typo

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I was just going through some random charts and this one popped out at me. Obviously, I'm interested in everyones thoughts but I thought I would post my own as well. Oh, and don't mind the white candles - it's just a temporary experiment :o

 

There were three classic rejections at the 20ema with great candle setups. But this last week showed advancing volume towards support, followed by a high volume hammer at support. I think this could be a great counter trend setup to the 20 ema, and if that breaks a potential double bottom. The risk reward is nice as well, something we should all look for in these trades.

 

attachment.php?attachmentid=8624&stc=1&d=1227334029

 

I decided to add AAPL, since that's another good candidate to watch. Similar situation, except the 20ema helped build the triangle formation. I personally played this one, and was short from $100 down to around the $80 mark where I took some off the table and hedged the rest.

 

attachment.php?attachmentid=8625&stc=1&d=1227334338

 

 

I apologize these aren't the ES, but you get the point.

5aa70e9bbd5c8_madailynov21.jpg.11047347f6b09a9846befd7c2624f63f.jpg

5aa70e9bc10a2_aapldailynov21.jpg.e48d62e89b8ee78b1b527497a96463c4.jpg

Edited by james_gsx

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Although the original setups were meant for trading with the trend, no reason why one cannot scalp in the countertrend mode as you suggest with the 20ema as the target.

 

Also blending candle helps as a 2bar or 3bar reversal on a lower time frame exhibits itself as a hammer(for uptrend trading) or upthrust(for downtrend trading) on higher timeframe charts.

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Hi James,

as you asked for "everyones thoughts" ..here I am...

Commenting the first chart from the beginning I would have "probably" taken the first and second entry of the 20ema while i would have probably skipped the third one (white candles don't help but I suppose first one to be green second red :) ).

Reason why I wouldn't is that I normally try to enter a trade on a pullback (whatever it is EMA20 or other S/R)evaluating the momentum of the trend and I "normally" do this comparing the length of the legs between the swing high/low (a zig zag function). I arrived to evaluate momentum this way after trying all possible indicators and failing using them..so, in this case, for the first entry I would have compared the leg from 250 (Swing High) to 180 (Swing Low) with the one from 180 (Swing Low) to 220 (Swing High) and entered the trade. So for the second where the ratio is even better. For the third one the length of the leg down is very close to the length of the leg up so, based on the momentum, and unless there was some old strong support in that area I wouldn't have taken it.

Based on this, my analysis is first telling me to wait before trading short along the main trade.

 

I personally also consider the hammer on increased volume you outlined a good potential reversal signal...however, based on my trading strategy I wouldn't take it and waited for the classic double bottom to materialize. Basically I think in this case I would wait until it breaks 150 and then wait for candlestick pattern on a pullback area (EMA20 or other main S/R).

 

Can I ask which stock is that one ?? ...so that I can monitor the behaviour in the next days and maybe if something happens we can try a follow up to any potential trade (simulated one for me in this case as I am no more trading stocks from last year).

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Fedeo, good post. The first stock is MA, sorry I forgot to mention that the first time.

 

One problem that immediately comes to mind with counter trend trades such as these is movement. Often times, price will simply move sideways as the 20EMA catches up to price, then it will continue to move in the direction of the trend. But sometimes, you can get a nice bounce. It all depends on how your plan is set up. A better example would be if you were already short, that would be a good signal to take some off the table, or take your entire profits and wait for another trade setup.

 

As for the white candles, the idea is simply to study price movement and not necessarily if price went up or down for the day.

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It certainly looks that way BF, prices have been in range for a few days now, also the seasonal factor favours upside under normal circumstances, but with this ongoing credit crunch and loss of confidence who knows.:)

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