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Old Jun 15th, 2011, 01:10 AM   #13
traitor786
 
 
Join Date: Jan 2011
Location: montreal
Posts: 803
1. Making Channels

A) In a downtrend, first draw a top line connecting the highs (TL,
or trend
line). Then draw a bottom line that is parallel to the top line
(this is called copying). This line encompasses all the lows. ***

B) In a uptrend, we first make the bottom line and then copy
(make a parallel line) to the top.

*** {We are assuming we only need 1 low point
at the bottom}

C) A channel by definition is 2 parallel lines that encompass most
or all of a trend. ****

D) Channels need to be adjusted from time to time. ****

E) Channels can be changed and expanded.

F) A channel can be expanded if TL’s are penetrated

****It should be noted that others use a more complex way
to do this involving finding a swing low in the center of a trend
line to identify where the bottom TL lies. Also, this system
seems to have certain rules as to when a TL can be adjusted.
This system needs to be clarified****

G) Once a channel is broken, we can make a new channel. We
can go deep into the old channel to find points that support
our new channel***

***if the points in the old Channel don't connect with point in
the new channel can we simply ignor points within the old
channel***

H) It seems like not everyone sees the same trend lines.

I) Trends do reverse. Think of resistance or support as a sand
wall, as it keeps getting hit, the wall starts to crack and
eventually will break." as stated by oraclewizard77


2 RESISTANCE AND SUPPORT.

A. Support can become resistance. This resistance/support line is
identified by a horizontal line taken from the bottom of the
previous apparent low or top of the apparent high

3 TRIANGLES

A) Trend lines are drawn to connect highs and lows during a
horizontal consolidation. These lines are not parallel. In this
case we have a triangular formation.

B) Examples of a triangle are:
"wide symmetrical triangle formation" a wide triangle the
has its center line horizontal.
More to come as we come across them.

C) Whenever possible, we use non-parallel lines to make a
triangle instead of a channel

***Is this correct and Does this apply only for horizontal
trends?***

D) Triangle formation mean that a break out will occur. Unlike
channels, we have an idea as to were it will break. (Before the
lines converge)

E) Break outs coming out from a triangle are more strong then
ones that come out of a channel***

*** Is this true and is there a way to know how big the break
out will be

F) If we see that there is a fail to hit a TL of a triangle. It shows
a weakness in price to move in that direction. ***

*** Is this weekness on its own enough to short in a down
trend?

G) If a Wide Symmetric Triangle occurs during a downtrend
chances are it will break resistance and fall

H) To better time and judge a entry point, we can look at a 1 min
chart. In the one minute chart we can see if price was not able
to cross a 20 day moving average (20 EMA) The 20 EMA acts as
resistance and support, We should wait to see it retested. ***

**** Is this a rule only for triangles? Or is it a general rule
that can used for any trend? If so this should be in a
different category.

I) By viewing what is going on inside a triangle we can make an
assumption about where the break out will occur.

3. GENERAL

A) When we have an indication of price movement that may not
be a strong indicator we can look for another weak indicator
to confirm our move by looking at a 1 minute chart.


POINTS OF ENTRY

A) If you don't adjust your Channel, short in a downtrend. When
price just cross's the channel and comes back in. There is no
need to wait for another bar, as soon as it crosses in you can
short.

B) If you do adjust your trend line, then short whenever price
touches the top of a channel in a down trend and price is seen
going back down.

C) Keep shorting every time this happens until we hit the lower
part of the trend line.

D) We only short in downtrends and only go long in uptrends
{is this corrcet}

E) 2 If the open and close are not outside the channel it is not a
place to enter***

** This may only apply for people that don’t adjust there
channels right away.
*** If there is a close out side the channel but the open is in
the channel would this be a good place to short?
    Quote
Old Jun 15th, 2011, 01:27 AM   #14
traitor786
 
 
Join Date: Jan 2011
Location: montreal
Posts: 803
OK. The first set of rules has come out, by adding to it we can slowly paint a picture that takes in to account basic, medium and advanced concepts.

I understand I'm not the worlds best writer. And I know at times my posts are incoherent and long. The goal here is build a knowledge base that has reference to other threads and has explanations on this thread if you dare try to scroll though it.

Unfortunately, when I am lost things on the thread will get a bit messy.

As we go on we will explore more and more concepts and challenge others at times. Also, we will see the differences in the way different people trade.

We will slowly develop a bible for trading that will be in point form and more details will be available here.

As it has proven to more time consuming then I had thought I will wait to see how many people are following this thread. If there is interest, and people are willing to help find answers to questions
I will continue.

You can always add rules to the thread as long as they are explained
    Quote
Old Jun 16th, 2011, 12:39 PM   #15
killingtheta
 
 
Join Date: Jul 2010
Posts: 41
If you don't mind, I would like to share a pattern that I have been coming across over and over and over again while I have been backtesting. My backtest consists of entering with the trend on minor retracements. Preferably a pullback to the 20EMA. I believe Al Brooks describes this in his book, but I did not understand it until I saw a post with a chart by NoDoji in Metals thread. At some point hopefully soon, I will have completed a thorough backtest for this pattern and will be able to give specifics as to what the expected outcome for this trade is. For now, it works more times than it doesn't.
NoDoji pointed this out on page 69 of "A simple price action approach" and describes it pretty well. It involves a failure of a test of s/r and a breakout of a triangle drawn by trendlines.
Here is an attachment for a trade I took using this method today.
With any luck, we can get Nodoji to comment.
Attached Images
File Type: jpg es 09-11 (5 min) 6_16_2011.jpg (131.7 KB, 146 views)
    Quote
Old Jun 16th, 2011, 12:55 PM   #16
traitor786
 
 
Join Date: Jan 2011
Location: montreal
Posts: 803
ok well what i see is a buy in an uptrend after price hits support of a channel.. is there any other indication to buy besides the a bounce off support ?
    Quote
Old Jun 16th, 2011, 02:02 PM   #17
IanMacQuaide
 
 
Join Date: Feb 2007
Posts: 1,873
traitor, are you using a 5 min chart for all of this?
    Quote
Old Jun 17th, 2011, 03:26 AM   #18
traitor786
 
 
Join Date: Jan 2011
Location: montreal
Posts: 803
Quote:
Quote from killingtheta:

If you don't mind, I would like to share a pattern that I have been coming across over and over and over again while I have been backtesting. My backtest consists of entering with the trend on minor retracements. Preferably a pullback to the 20EMA. I believe Al Brooks describes this in his book, but I did not understand it until I saw a post with a chart by NoDoji in Metals thread. At some point hopefully soon, I will have completed a thorough backtest for this pattern and will be able to give specifics as to what the expected outcome for this trade is. For now, it works more times than it doesn't.
NoDoji pointed this out on page 69 of "A simple price action approach" and describes it pretty well. It involves a failure of a test of s/r and a breakout of a triangle drawn by trendlines.
Here is an attachment for a trade I took using this method today.
With any luck, we can get Nodoji to comment.
Yes I really like this chart. what are your thoughts on it ?
    Quote
 
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