Recap 29 Nov Method expanded multi time frame analysis 2

These were my comments from 29 Nov.

EUR - Y closed a strong hammer so we should move up today. 4hr has signaled higher. Only time will tell if a move up will be the last try from the bulls and if we are getting close to a 4-7 day topping out process. Should we get to 1.30 potential for an 85/15 trade.

Please see popular posts Method expanded multi time frame analysis.

We look to follow the daily candles as much as possible. Trying to keep things as simple as possible we:

1) try and identify support and resistance levels
2) look for positive/negative closes to follow through the next day (as we believe this will hold true approx 70% of the time)
3) watch for divergence
4) Look for D chart higher lows/lower highs, double tops/bottoms, engulfing candles, hammers/shooting stars, morning/evening star patterns
5) rsi crossing its moving average or crossing the 50 line

If we are confident that a confluence of the above exists then the next day we will look to trade in 1 direction only. This keeps us out of some head fake moves typically around London open and the US open (weak counter trend 1hr candles in and around US open just as big a fake move as LO).

Now if we apply the above simple concepts to 29 Nov's EUR set up.

1) Resistance level identified, the Feb/Apr lows in and around 1.30.
2) 28 Nov EUR closed a hammer, lower wick suggests failure to go lower. Previous analysis to that suggested D had not yet even closed with a sell signal. RSI had never crossed lower and price had not closed below our 8 lwma. This put together suggests higher on 29th.
3) Not applicable.

4) D higher low hammer.
5) RSI still above its ma and 50 level.


So now we have 2 major pieces of information. First we are looking to buy from 15 min, 2b or higher low/double bottom hopefully with engulfing close (close above 2 previous closes) at the extreme of price range (not the 3rd or 4th higher low in move), on 29th around 1.2950. Second bit of information, we are confident that 1.30 is a key target (so 85/15 has potential).

Some very basic D analysis can increase your odds.

Recap and EUR, GU, EJ 29 Nov

Recap 28 Nov.

Did not post but this is how it played out.

EUR -  We had no D signal to sell as yet, no RSI cross lower, the red doji couldn't close below the moving average. 4hr did signal a sell, lower high following negative divergence did set up a move down which stopped at the W pivot.The 4hr signal without a D signal = a short term position.

29 Nov

EUR - Y closed a strong hammer so we should move up today. 4hr has signaled higher. Only time will tell if a move up will be the last try from the bulls and if we are getting close to a 4-7 day topping out process. Should we get to 1.30 potential for an 85/15 trade.

GU and EJ essentially the same picture.

Bias up, taking great care at recent highs. 

Recap 26 Nov + EUR GU EJ 27 Nov

Recap 26 Nov

London session narrow range allowed scalp trades. There was a move up last night, not sure the reason (new govenor of Bank of England perhaps or Greek bailout decision).

27 Nov

EUR - At the previously identified resistance level. 4hr and 1hr showing negative divergence. It still does not seem like there are sellers at this key area. Focus still on buy dips until D signals sell or there is a re test and indication of failure at the highs. Bias up.

GU and EJ in a very similar position.   

Recap + 26 Nov

Recap 23 Nov

Bias up with potential to fall. Some scrappy price action in London morning session and price moving up with bias in US session. We focused on EJ but there were good buy trades on all 3 pairs.

26 Nov

EUR - Approaching the resistance area from Jan-Apr 1.30. D solid engulfing pos close. 4hr RSI crossed below its ma but price above its ma. Bias up but reaction from the resistance level must be considered.

GU - Solid D engulfing close. We are at a 62% fib/resistance level/W M3 confluence so there is clearly potential to fall. In view of D this viewed as chance to buy dip in rally.

EJ - Solid D engulfing close. 4hr RSI crossed lower, 4hr and 1hr negative divergence so there is potential to move lower. Bias up.

Price action on Monday mornings (like Friday mornings) can be erratic whilst the market finds its feet. Should this be the case and we hesitate to move up giving an inter day higher low to signal buys in US session that's fine.

4hr charts W pivots

This weeks 4hr charts with W pivots, again (with support and resistance levels) showing how important they are.

Methodology MTF analysis

Got this question.

can you please explain your methodology in detail with examples and how you take trades, as the issue im getting is that 1 or 2 loss/bad trades wipes all my profits everytime ..... i want to know how you identify the trend on daily and then take trades on 15m TF..

and when you dont see any trend on Daily TF then how do you take trades next day? im getting frustrated with few losses tht wipe my profit..... its happening time n again!!

in addition what SL and TP do you set?

looking forward to your assistance

I trade MTF analysis with entries from 5 min. Approx 2 months ago switched to 15 min entry with focus buying above 15 min 200 ema, selling below. Good results became borderline unbelievable. An old dog can learn some new tricks.

I start with an analysis of D chart for trend. Looking for:

Good candles should follow through the next day e.g. an engulfing close (don't even worry about the correct definitions and perfection did you close above or below the previous 2 candle closes)
Did the candle break the immediate range
Did the D itself have a HL or LH close back into trend, i.e. did the D flow continue
Did we have an evening/morning star pattern (yes ok I know thats also a close below/above the 2 previous closes)
Are we above/below the RSI 50 level
Are we above/below the tight D ma

Once some/most/all of these things happen the following day becomes more focused, the ability to be patient is easier as you are almost assured (well as much as you can possibly be in this game) that things have a great chance to play out in line with 15 min trend entry.

I literally run through my list as above every morning to look at prev days close for 3 pairs eur, gu, ej and try and get some clarity as to what may happen for the coming days trade. Yes sometimes pairs go into a sideways funk on D but generally 70% of time 1 day follows the next. Its not rocket science or anything weird, just common sense.

From D chart analysis I'll do similar on 4hr and 1hr looking to identify the flow of the market i.e. higher high higher lows, or lower highs lower lows.

See EJ D chart attached for some analysis:

Left arrow up. We are above 50 RSI, RSI above its ma, we have a hammer (wick rejects move lower), D ma sloping up nicely. Everything suggesting D trend up. Focus should be buying the next day as the only possible worry could be the failure of the hammer to really trade higher than the previous day.
Left arrow down. D rsi crossed below its ma. 2 upper wicks, taken 3 days to turn (turns often take 3-7 days to play out), an engulfing neg close (close below the 2 prior candle closes). I trust an engulfing close (when price on any time frame can break its immediate range thats normally a good sign), I trust D rsi cross of its ma. OK this sell signal could be the start of a move down or it could be a pause in uptrend, that I don't know. Whats happening on 1hr and then entry from 15 min should keep me out of too much trouble. What follows is 5 days of sell focus from 15 min.
Arrow up 2nd from left. Taken 4 days to bottom out and for RSI to cross up, we are also trading above our ma. The candle has an upper wick so its not a clear signal. Again could go up or be small rally in downtrend. Analysis of 1hr flow and 15 min entry again should give final guide. Even if you missed a day and waited for 2 Oct positive close you'd then have 4 days of buy focus. Or look at other pairs to see the have given a clearer signal.
Arrow down 2nd from left. Engulfing close, RSI cross focus on sells the next day.
Arrow up 2nd from right. An engulfing close, morning star pattern from an identified support level. Bias on buys for next 5 days.
Arrow down right. A D lower high, engulfing negative close, RSI touch trade below 50 level. Focus sell the next few days.
Arrow up right. Morning star pattern, from support area, engulfing positive close, RSI cross on 50 level. Buy focus from then on.

Like I said once I have my D view then its a question of waiting for the trades to fall into place. I'll still look at 1hr flow but its 15 min entries as per this thread.

Stops typically below the last 15 min swing high/low if its to large (above 25 pips or so) then we'll probably leave. The last swing high/low + some pivots/RN's/SR level should also be between your entry and stop to provide some buffers (2 or 3 would be good).

Take profits at the moment we are exiting half at first typical area around 30/40 pips that could cause a problem (RN, SR level, W pivot) and leaving balance to try to get to 2nd key level closer to 5 day ADR (again RN, SR level, W pivot).

If we don't see anything on any of the 3 pairs we have no problem with not trading for the day. At 2% risk a 60 pip day is a 6% return thats good enough for us. Many traders I have seen say they trade less frequently as they get older, that applies to us as well as neck/back issues that hinder chart time.

If you are inconsistent take a critical look at your winning and losing trades. What do the losing trades have in common? I was having many losing trades from 5 min on 3rd/4th move in London morning session. Guess what I cut that trade out. Now I couldn't care what that trade does as I know statistically its a high risk venture. I cut out 5 min higher low/lower high trades that were counter the London morning direction that were set up from weak 1hr candles pre/early US session. Again now I don't care what those trades do, for me they are a high risk bet (a solid engulfing post US news candle a different story). If we are not in already from Lon open we are waiting out pre/early US session CT moves and looking for London's direction to resume.

A through analysis of your losing trades can work wonders. Could be as easy as you are trying too many CT trades (London close has a proven CT strategy but thats a different issue i.e. its proven).

Recap + EUR GU EJ 23 Nov

Recap 22 Nov

EUR and EJ had strong moves up as per bias. GU fell from the general resistance area and W R2 1.5962.

23 Nov

EUR - Pos D close above 50 RSI level. 4hr higher high higher low in tact. 1hr shows first signs of stall. Bias up.

GU - D neg close doji, RSI on 50 line and still above its ma, price still above D 8lwma. 4hr higher high higher low flow still in tact. 1hr has the potential to flip over first to give a lower high. We are at a resistance level. Bias up but a negative engulfing close on 1hr would signal potential scalp sell.

EJ - D pos close, RSI flat. 4hr RSI crossed below its ma. 1hr lower highs showing but we seem to have a base around 105.90. Bias up.

There is potential for scalp sells on all 3 due to 4hr and 1hr, these will be against the D which has not yet confirmed. 

Recap + EUR GU EJ 22 Nov

Recap 21 Nov

The news spike lower did not follow through and all pairs returned to trend. EJ was the easiest to pick up on with the moving averages sloping up still. The most basic of trend indications.

22 Nov

EUR - D chart shows no real progress higher for 2 days now, popping higher this morning only. We are at a general resistance level or it could be the market waiting for the outcome of EU meetings. Bias up.

GU -  Making better progress higher than EUR. We are in general resistance area also. 4hr higher high higher low flow clear. Bias up.

EJ - The strongest mover of the 3. Looking to buy dips. Bias up.

With a very strong move yesterday, after the dip, we'll see if US holiday calms things down a little.

EUR GU EJ 21 Nov

There seems to have been a big move pre European market open on news/rumour. We'll have to see follow through. Also UK MPC minutes this morning but there shouldn't be surprises there with the state of UK economy.

In view of the drop bias down. 

EUR GU 20 Nov

EUR - D engulfing close, 4hr flow now higher high higher low, 1hr has potential for a triple top at the resistance level/W R1 pivot. Bias up.

GU - D pos close, at last weeks high. 1hr flow on higher high higher low. Bias up.

Both pairs short term bias up but the ranges are so small anything could happen.

Autochartist at Vantagefx.com

Autochartist highlighting the rising wedge on USDCAD. Follow the links to view the analysis.

EUR GU 19 Nov

19 Nov

EUR - D RSI is above its ma but below 50 level. Thurs positive close candle could not follow through. Still within range 1.27-1.28. 4hr and 1hr show strong move up from Fri's London close bounce. D still on lower high lower low flow, 4hr and 1hr running against this. No real bias either way.

GU - Very similar picture to EUR D still on lower high lower low but 4hr and 1hr running up. W pivots stacked tightly due to last weeks narrow range. No real bias either way.

Anatomy of a trading day EUR

Posting these from time to time as it never ceases to amaze me how often days play out like this.

EUR made a high the previous day and 1hr flow flipped over from higher high higher low to make lower highs.

15 min engulfing neg close left arrow down. Avoid the pre/early US counter trend fake out. 2b then lower high back into days trend, arrow down right. We have had relatively narrow range days so 1.2700/W M2 a good target.

EUR GU 4hr W pivots

Relatively narrow ranges this week. Another week, the same story, the W pivots and SR areas prove their worth yet again.

Recap + EUR GU 16 Nov

Recap 15 Nov

EUR - Short term bias was up with potential to sell off from W pivot. Buy trades signaled and followed through higher.

GU - Bias lower never followed through.

16 Nov

EUR - D pos close stopped by the 1.2810 support/resistance level and W pivot. 4hr and 1hr flow on higher high higher low. Strong push US session on news. Bias up but efforts to go lower would be no surprise.

GU - D pos close still below 8 lwma. 4hr showing divergence but still on lower highs lower lows. Big push up in US session not following through higher. Bias still down.

Recap + EUR GU 15 nov

Recap 14 Nov

Short term bias was up against the D charts which had not yet signaled. Price action very erratic.

15 Nov

EUR - D RSI crossed above its MA but still below 50 level, did not close above 8 lwma. I am not aware of any fundamental game changing news so viewing this as a pause in downtrend. If this is not the case and the start of move up then can probably expect another few days up and down whilst a D double bottom/higher low forms. 4hr appears to have broken lower high lower low flow. The move above the W pivot was rejected strongly and we have the potential for a head and shoulders pattern, clearly seen on 1hr. Negative (sell) divergence on 4 and 1hr.

Short term bias up with potential sell from W pivot.

GU - Much clearer charts than EUR. Whilst the daily ranges are shrinking we are still on lower high lower lows. The W pivots and support/resistance levels clear again from yesterdays range.

Bias down.

EUR GU 14 Nov

EUR - No real progress lower for 2 days now. D closed a doji yesterday, still below 8 lwma and RSI 50 level, indications of potential divergence. Struggling with the June '12 highs support level. 4hr divergence but lower high lower low flow still in tact. 1hr lower high lower low flow broken, move up from Y's lows with divergence. Double top at Y's high at the moment.

Short term bias up (4 and 1hr) can also sell solid 1hr set ups from pivots/key levels as return to D trend.

GU - Same as EUR no real progress lower but we have no D signal for buys.

Short term bias up (4 and 1hr) can also sell solid 1hr set ups from pivots/key levels as return to D trend.