Cable Musings

[Anna-Maria 10]

Thought I'd kick off a fresh thread try keep some of these strat ramblings in one place. Don't want to disrupt Raul's specific 'breeze' comments or send other threads off on a tangent etc.

 

That way, folks can ask questions, comment & add their own bits & bobs to the content.

 

Was touching on a couple elements of this strat with torero & Soultrader earlier in the chat-room, & thought it might prove helpful to sling a chart up to better explain today's reasonings & subsequent postings.

 

Basically, I have very little clutter on the charts. Wherever possible, I look to run with the current flow - observing the 240 & 60m frames will offer me a heads up to the current scenario.

 

I'm only really interested in executing via the short-term momentum on this set-up, therefore I want to plot my overnight resistance/support lines (35&50% of the prev day's 5.00pm NY close), + the Asian high-low, which I determine from midnight London (19.00 EST) thru to the 8.00am (03.00 EST)London open.

 

I'm a discretionary price action trader - I don't observe indicators, system rules, EA parameters, mov avg crossovers or any other fancy nik nak's.

 

I plot horizontal s&r lines via the 240/60m frames & am aware of those timeframe scenario's: ie, whether Cable is forming lower tops/higher bottoms/ranging/trending/chanelling etc.

 

But primarily, I follow the candle/bar footprints. I want to see neutral-exhaustive behaviour @ resist-supp levels....I also prefer to witness price adhering to the short-term flow or trend.

 

I also prefer to execute this set-up during the London morning shift. I'll take price on at other times sure, but my most productive periods usually ensue on an Asian range bust of the early London flow.

 

I won't chase price on the back of a data release spike. If the Asian b/o is nudging close to an important UK data print, I'll let it go & attempt to pick it up via a pullback opportunity, providing it's running with the general flow.

 

Same consideration for Stateside data. I'm only concerned with sensible, reactionary behaviour....NFP or other Grade A spike material isn't part of my remit. I'll leave those knee-jerk gambling throws to others.

 

I use the % s&r levels as either exit points or paring opportunities. Stops are positioned above a prev high in a downtrend/low in an upkick. Once partial profits are removed, I'll hike the stops to b/e.

 

If price continues, I'll trail them to near term waves on the 15/5m charts or farther out to the hourly reference (if price really shifts).

 

As I said, I trade on a discretionary basis, experience & awareness of your instrument(s) is crucial taking this route, which will only develop over time.

 

I don't trade every day, neither do I take every single opportunity....each trade has to stack up on it's own merits!

 

If in the slightest doubt, I remain sidelined. There are plenty of opportunities to execute A Grade set-ups across the trading calendar month, the markets aint going anywhere - I'd much rather be "out wishing I was in, than in wishing I was out"

 

anyhow, once again, today offered up a pretty typical opportunity.......

 

short-term trend is down, lower tops on the 240/60, 9050 offering decent resistance ambling into London thus reflecting today's S2 zone.

 

price backed away from the Round Number (9110) edging into the London open, bracketing today's Asian range. It failed to take out the Asian top (9050) & popped thru the low on the back of the UK CPI print.

 

The trade is highlighted on the accomanying 5m chart, with supporting price aid info....the 2nd opp is also highlighted - again post-U.S data, making a bee-line for the earlier resistance zone, which reacted handsomely with my favored Fib number - the 78.6%, before falling away nicely to set up a further pullback shorting opp.

 

torero: hope this post further clarifies our brief conversation in the room!

[torero 10]

Simple! I love it! I told you your method had the style I wanted, simple with price action. We're going to be good friends, you and I.

 

I'll have to reread your post a few more time and see if I can set this up myself on my charts. Hope you won't mind the questions.

[Anna-Maria 10]

All, any questions/comments welcome.

 

Not much use posting commentary if it's not open to ineraction

 

I'll try post regular observations on here (both positive & negative) as triggers set-up, and time permitting, as close to live scenario's as possible.

[Soultrader 12]

Thanks texxas. I am starting to fall in love with your trading style. I am a strong advocate of keeping trading as simple as it can be.

 

I rely on price action: tape, market internals, pivots, and market profile. I use ZERO indicators on my tick chart. I absolutely hate indicators.

 

Keep us posted!

[Anna-Maria 10]

Thanks for the feedback fella's, glad to hear it strikes a chord

 

A little insight to what I plot on the larger timeframes. I won't post up the Weekly/Daily frames, as they're more or less self explanatory.

 

The main gist of those 2 big dogs are the main swing Fibs and/or bar behaviour which prints on them.

 

As with the smaller frames, I'm merely seeking some kind of confirmation of the current price action (trending/ranging/consolidating etc).

 

It's the lower 2 frames which I focus on more intently for this set-up play. I pitch up the 'obvious' horizontal s&r levels & then map the 240m swing Fibs to see how far or close they print in relation to any hard price based s&r levels.

 

If a confluence exists, all the better - if not, I'll merely observe the 5/15m price bars as they begin to threaten these area's....once again, I'll look to these zones for paring out partial positions and/or full exits.

 

The lines get updated as price meanders up & down the ladder. The only Fib levels I bother with are from the Daily/240m frames. I don't really consider anything lower than that on the Fib front.

[Anna-Maria 10]

ok, so we have tomorrows s&r levels from today's close:

 

R1=8983

R2=8996

 

S1=8920

S2=8907

 

We've travelled down 2c since Monday's open & approaching the 38% (8920)marker of the larger 240m swing from 8517-9180.

 

The S2 also coincides with the (1.89) Big Number, so should price get pressured toward this support zone, we might encounter some whippy activity?!

 

Will mosey in tomorrow morning & plot the Asian range barriers....see if anything likely sets up!

[torero 10]

I wanted to ask you if you use any correlation between pairs as part of your technique? Quite a few sites use this as basis for analysis. Although I've never used this in futures trading, not sure if this is an important factor in forex.

[torero 10]

2 more questions: since we're using GBPUSD as an example, why would the Asian hours H/L would be important? I understan EURJPY or USDJPY. Would NY H/L would be more important?

 

In reference to R1, R2, S1, S2, is Pivot point used at all?

[torero 10]

Here's the setup I have tonight with S1, R1, Asian H/L for EURUSD. Am I missing NY or London H/L, and Fibo lines here?

 

I take it that the congestion/support is located 1.2800 area? The next move down is 1.2777 (S1)? And up move is R1 or 50% fib retracement?

 

[Anna-Maria 10]

torero:

 

These are the brackets I have for the Euro.

 

I won't plot the Asian levels until Frankfurt opens at 02.00 EST (which it just has).

 

This will now give me the Asian H-L as: 2817-2799....kissing the R1-S1 % levels from last nights close.

 

Remember though, I don't trade Euro on momentum plays - it's too cumbersome & lacks the speed/agility of Cable.

 

Euro is more suited to swing plays (for my purposes anyway).

[surfer 10]

Hi,

 

yesterday´s low in the NY session was at 1.8925 and the high at 1.9033 (Oanda).

Pip diff. is 112.

 

Close was at 1.8956.

 

35% from 112 = 39

50% from 112 = 56

 

 

R1 is 1.8995

R2 is 1.9012

 

Where is my fault. Thank you.

[surfer 10]

On the attached chart you can see how the cable broke the asian low and went to @20.

 

I was 5 minutes to late. My coffee was not finished.

[Anna-Maria 10]

2 more questions: since we're using GBPUSD as an example, why would the Asian hours H/L would be important?

 

I understand EURJPY or USDJPY. Would NY H/L would be more important?

 

In reference to R1, R2, S1, S2, is Pivot point used at all?

 

Regards correlation: I'm aware of the positive/negative correlation between pairs, but they play little part in my short-term strats.

 

Given I trade the Cable predominantly via this momentum set-up, I'm more concerned with this pairs behaviour (both technical & fundamentally), than I am with the effects of it's trading cousins.

 

The Tokyo high-low range is often a pre-cursor for the London breakout. Prices will be contained during Asian trade and/or get shuffled back & forth from the N.Y close if the prev London-N.Y sessions have resulted in a Big Day (reasonably large move).

 

Sure, you'll experience 'false breakouts/2b type scenario's' on the Tokyo-London overlap, but that's why I prefer to trade these events via a pullback.

 

The Tokyo-London switch over can quite often be the signal for the "move of the day" - if it busts the upper or lower s&r guides, then it's highly likely to print a Big Day

 

I don't use the main pivot point at all in my observations for this set-up. I work principly off the prev sessions (NY) closing price & adjudge my s&r levels from there.

 

As I mentioned in a prev post, I religiously record the H-L-C data from each sessions activity & keep an eye on the % movements for each session.

 

I will then go back at the end of each month/quarter & compare the volatility, any extreme disparity from prev months data + merely confirm whether or not my closing price % s&r zones require adjusting to reflect any change in price activity.

 

Markets never stand still, there are always new occurances which affect it's journey. By keeping clear & precise records of each pairs month-on-month activity, I can better see these changes & oscillations.

 

Which is why I prefer to use these specific % markers as my guide!

[Anna-Maria 10]

 

Close was at 1.8956.

 

35% from 112 = 39

50% from 112 = 56

 

 

R1 is 1.8995

R2 is 1.9012

 

Where is my fault. Thank you.

 

Hey surfer.

 

It's only the CLOSING price which I use to determine the S1&2 R1&2 levels from.

 

These levels are representative of an average deviation of price, based on it's previous behaviour traits. ie: when prices fail to break out into a large move, they will be contained within a 35 to 50% barrier from the prev sessions closing print.

 

Thus, if prices are ranging or edging into a consolidation phase, I'll look to sell R1/2 & buy S1/2, providing the candles/bars set up & trigger me in accordingly...

 

As to your prev chart posting?....the Asian range has not yet completed. Personally, I want to see this range complete as London opens for business (03.00 EST) before I plot my H-L levels to completion.

 

At the moment, 8920 is signalling the Tokyo low level.....it also coincides with my S1 level.

 

Thanks for your comments

[surfer 10]

I thank you soooo much. Wish you nice trades.

 

[Anna-Maria 10]

torero:

 

 

In reference to your question re: prev sessions H-L prints....

 

I use the prev 2 sessions highs & lows as my initial extreme reference guides.

 

Price stopped at these levels for a reason? Therefore, as price moves towards them again, I'll be aware of the possible reaction around these levels.

 

Should they coincide with a Fib zone from a prior swing point, all the better, as it strengthens that particular zone....if not, I'll treat them as "potential to react" - nothing more.

 

I tend to observe these lines as merely "observation guides"...nothing's set in stone, PRICE dictates the journey, based upon supply & demand.

 

If the consensus dictates price will bust a prev level of activity due to the strength of activity, so be it.

 

If enough traders become spooked at a prev zone of s&r, then price will stall - it's the bars/candles behaviour around these levels which influence my decision....the observation lines simply assist in my decision making process.

 

My risk (stops) & position stake sizing will control my entry/pares/exits - what price decides to do in the meantime is out of my control, I don't have any influence on that part of the equasion.

 

I can only control my reactions to it/them

[Anna-Maria 10]

Nothing really setting up for me this morning thus far. Price being contained within the Asian range & the s&r levels in early London trade.

 

We have the B.O.E quarterly inflation report printing in an hour, + the NY Fed releasing their Manufacturing Index Report @ 8.30am EST.

 

Of course the main item of today's calendar will be the F.O.M.C minutes @ 14.00 EST, & likely the main players will simply be sitting tight until these releases print.

 

The fact we've moved a couple cents this week already & the weekly trend is negative, it's not particularly surprising Cable is catching it's breath.

 

A case of 'wait see'.....no hurry, they'll be more productive opportunities when price opens out again

[torero 10]

Let me summarize what steps I'm taking to mark these S/R, pivots, H/L, etc. Correct me if I'm missing something or doing it incorrectly.

 

1) I first create 3 different sessions and mark their H-L-C (NY, TOKYO, and LONDON).

2) From each session, I would market their pivots (S1, S2).

3) Once I'm done with that, I can go set it back to 24 hour format and view the price action.

 

Would these step help me find the right levels? My biggest hurdle is the session hours (I never to deal with this in futures). Raul was the first person who mentions about different world openings/closes to find important levels. You're the 2nd so this is quite new to me.

[Anna-Maria 10]

 

A case of 'wait see'.....no hurry, they'll be more productive opportunities when price opens out again

 

I've just shorted (smaller than avg position) this bust of the Asian low/pullback level....

 

It requires "watching" due to close vicinity of this 1.89 Big Number, hence the smaller stake size.

 

I'll take some off at the Round Number to protect my stops & reduce the risk.

 

I have next level price s&r zone on my 240m @ c8870 - I'll get the remaining stakes to b/e should price bust thru this Round Number & look to further pare out as price moves to next stage (c8870).

[surfer 10]

@torrero

 

This morning I had the same problems like you (different timezones).

 

I found something useful on this side:

OANDA FXMarketHours - FX Markets Working Hours

[torero 10]

Very nice break! I just noticed the gap at the opening. I'll follow Cable since you explain more of it than EURUSD.

 

My intention was to use EURUSD to swing trade since I can't sit in front of the computer all day. But in the morning, I can follow you with Cable.

[torero 10]

@torrero

 

This morning I had the same problems like you (different timezones).

 

I found something useful on this side:

OANDA FXMarketHours - FX Markets Working Hours

 

Excellent page! Thank you, surfer. I'll need this until I can orient myself better with the zones.

[Anna-Maria 10]

Let me summarize what steps I'm taking to mark these S/R, pivots, H/L, etc. Correct me if I'm missing something or doing it incorrectly.

 

Would these step help me find the right levels? My biggest hurdle is the session hours (I never to deal with this in futures). Raul was the first person who mentions about different world openings/closes to find important levels. You're the 2nd so this is quite new to me.

 

ok, I'll try explain a little clearer what I view as the important criteria?

 

My observations are primarily based around the 24hr activity.

 

My session markers begin at the Asian open (7.00pm EST) & ends at the next New York closing zone @ 17.00 EST.

 

My main frame of reference is the Asian session high-low (from 19.00 EST thru to 03.00 EST ), this offers me my bracket barriers for the next London open shift.

 

So, therefore I'm using 19.00 EST Tuesday to 17.00 EST Wednesday as my template for the current price activity research.

 

My R1-2 & S1-2 levels are derived from the 17.00 EST close & adjudged from there.

 

They're merely guides based on the "normal" range behaviour which I've calc'd from Cable's price oscillation inside the extreme moves - in other words, when Cable fails to run into a Big Day move (in excess of it's average daily range of approx 120pips), these levels normally contain the range levels.

 

They're of little relevance once price busts thru these levels.....this tells me we're in for some pretty heavy action, which normally ensues as price breaches a consolidation or ranging phase.

[torero 10]

Any chance where I can find a global calendar of scheduled announcements?

[surfer 10]

Any chance where I can find a global calendar of scheduled announcements?

 

Forex Forum and Calendar @ Forex Factory