Comprehensive Trading System/Methodology

[bbmac]

Sorry another question ... Off from work today and was thinking hard about the system 2 Pictures

The example you post shows that a 5min uptrend is present but the 1min chart looks more likely to see a reversal set-up which means a 5min Re-entry set-up...so you would need to act at a 5min re-entry set-up/1min reversal set-up only if there is a trend present on the time frame above the 5min (ie above the t/f the re-entry set-up appears on) and if the macd histograms are with the direction of the trend on the 2 t/f's above that that the re-entry set-up appears on.

Also the last HL you note on your 5min chart is actually a L the HL then LH occuring before it after the HH of the uptrend.

I have posted this before, Remember


a.Downtrend Potential sbr is generally a previous swing lo=previous resistance=potential support when tested from the topside

A potential sbr zone on the 5min is only good for a 1min re-entry set-up following a pullback, providing at least the 5min t/f is trendingdown and the macd hists on both 5min and 30min are crossed down/pointing down.

A potential sbr zone on the 30min is only good for a 5min re-entry set-up following a pullback (timed as a 1min reversal set-up,) providing at least the 30min t/f is trending down and the macd hists on both 30min and 1hr are crossed down/poining down.


b. Uptrend Potential rbs is generally a previous swing hi=previous resistance=potential support when tested from the underside

A potential rbs zone on the 5min is only good for a 1min re-entry set-up following a pullback, providing at least the 5min t/f is trending up and the macd hists on both 5min and 30min are crossed up/poining up.

A potential rbs zone on the 30min is only good for a 5min re-entry set-up following a pullback (timed as a 1min reversal set-up,) providing at least the 30min t/f is trending up and the macd hists on both 30min and 1hr are crossed up/poining up.

** trending conditions guauged by overall price action analysis-classic peak/trough analysis

 

[bbmac]

Last one for today

I really don't see it as either, potential sbr might resuly from the more immediate/recent previous swing low=previous support if breeched to the downside and the t/f establsies a downtrend.

 

[bbmac]

BB would like to chk something with you. Do you look at the 1 min chart to find the initial setup or do you look at the 5 mins to look for the initial setup before looking for supporting setups?

THank you

I always look at the 1min first as it is the trigger but I am aware what type of set-up is most likley to develop on the 5min (if one does) to support the 1min trigger entry, and am aware too of the conditions on the optional small charts as these are all in view. Crucially too I have pre-identified potential supp/res/sbr/rbs on both the 5min [intermediate]and1hr [proxy re pot supp/res/sbr/rbs for 30min trend t/f] charts so know which areas I will be looking for a set-up...aware too of the overall price action conditions (trending/ranging) on both the 5min [intermediate] and 30min [trend] t/f's.

The set-up is the last thing you look for

a. identify potential supp/res/sbr/rbs on intermediate and trend t/f's
b. identify chart conditions on intermediate and trend t/f's ie ranging or trending

Price action is dynamic, it will cause the above a and b to change on the 2 t/f's you are analysing them on.
The above a and b are what constitutes 80% of the work involved with this trading system/methodology and requires active engagement with the market. Short cut these and your strike rate will suffer.

The set-up is the last thing you look for but when you spot one you know from a and b above whether or not to act upon it. The set-ups are accute observations of indicator patterns that repeat and in the correct overall tech conditions re a and b above give rise to high probability trading opportunities.

The individual price action is the actual trigger in the 1min trigger t/f set-up, and if you have done a and b above correctly and keep up to speed with them throughout your trading session, you will know whether or not such a set-up [preferably supported by a 5min (and maybe higher) t/f main chart set-up beit a reversal or re-entry set-up.] has presented itself in the highest probability circumstances.

 

[bbmac]

Optimum areas at which to act on a re-entry set-up

See Part III doc on page 74/post 10.

 

[babymush]

I don't really see the area you refer to unless it's the candle in the place you have circled??

Remember a potential RBS area generally consists of a previous obvious swing hi [=previous resistance] breeched to the upside and tested again in a pullback from the top side [as potential rbs]...but any potential rbs area has to be considered in the context of trend, ie only really valid if the time frame on which it is identified is trending...similarly and conversely for a potential SBR area in a downtrend.

As for the small charts, they and their use are discussed in both the DTS/M main pdf doc on post 1/page 1 and the Part I doc on post 74/page 10.

Reclarified it here

 

[bbmac]

Reclarified it here

I've labelled the questions you arise as points A B and C on the chart you posted replicated below;

A. Yes, A previous obvious price swing low (=previous support) breeched to the downside can be considered potential sbr on any retest from the underside, providing the time frame it appears on is in a downtrend per overall price action-classic peak/trough analysis. The confluence of a fib (s) previous bids now offers, and T/lines within the potenntial sbr zone would add to the confluence of potential sbr/res.

B.No, potential SBR that in the event fails to provide resistance cannot then be considered as potential support on any retest from the topside,...as far as previous price swing hi/lo's are concerned only a previous obvious price swing hi = previous resistance can be potential rbs after being breeched to the upside, on any retets from that topside, again providing the time frame it appears on is in a uptrend per overall price action-classic peak/trough analysis. (vice versa for RBS)

C.No, previous price swing hi/lo can not be considered as potential supp/res/sbr or rbs until the candle (s) making up the obvious price swing hi/lo are complete. In the 30min example you post, there was no uptrend in any event at the point you highlight ...ie potential rbs is only valid in an uptrend on the time frame it appears on, and conversely potential sbr is only valid in a downtrend on the time rame it appears on. (per overall price action-classic peak/trough analysis.)

Hope this clarifies things, ...always happy to help if not.

 

[bbmac]

Final post of the year

With 626 downloads of the main document outlining this trading system/methodology (page 1, post 1) I hope that more than Babymush have found it useful to whatever extent.

This trading system/methodology is centered around support & resistance and price action. In analysing price across 3 time frames, and ascertaining the trend and potential support/resistance across the intermerdiate and trend time frames, it provides detailed information about the instrument traded and as a result indicates both with and against trend trading opportunities, using individual price action as the actual trigger for market entry and overall price action as the determinant of trend.

The confluence of these technical factors (support/resistance and price action) gives rise to the highest probability trading opportunities and the addition of the technical phenomena of band deviation and oscillator divergence/extremes that make up the repeatable tech indicator based set-ups/patterns provides a high probability confluence of 4 technical factors that make up the trading edge.

Sometimes you will see a tech indicator set-up at an area that you have not identified as potential supp/res/sbr/rbs. Sometimes you might identify a potential supp/res/sbr/rbs area but no indicator set-up. Both these occurrences may or may not produce pip gain, but they are not the highest probability of technical confluence that this system/methodology indicates. These remain an indicator set-up at a pre-identified area of potential supp/res/sbr/rbs wirth individual price action as the trigger, within the context of overall price action conditions (trend or range) as determined by classic peak/trough analysis.

Staying engaged with the instrument you are trading, determining it's overall price action conditions and pinpointing areas that may act as potential supp/res/sbr/rbs derived from the 4 main technical factors that are proven to do so, that is the crux of the groundwork that is required during a trading session to ensure that you make trades only when the confluence of the 4 technical factors are present.

Hope 2009 is a prosperous New Year whatever your trading edge.

 

[babymush]

Just wanted to check

 

[babymush]

Thank you for all your guidance and advice and teachings. Still learning and losing money but I am sure I will slowly get the hang of it after much practice.

Happy new year to you and a prosperous New Year. Wishing you and your family the best of health.

 

[babymush]

Would like to clarify a sentence you used:

If a Re-entry set-up on intermediate chart ...... it is best at a pre identified potential sbr/rbs area on the trend t/f, into the trend t/f(+) <-- What does it mean by Trend T/F (+)

Thanks

 

[bbmac]

Just wanted to check

Yes would be the answer to the above scenario, The potential sbr zone being the area between the low of the swing lo and the lowest close of the candles that make up the obvious previous price swing low.

My general observations insofar of previous price swing hi/Lo's and their potential for future supp/res/sbr/rbs are that

a. The most recent/immediate price swing hi/lo's have the most bearing on present price action

-unless-

There exists a previous swing hi/lo is very pronounced/obvious and resulted in a major swing, or an area further back was tested mulitiiple times.

b. As you know the potential supp/res/sbr/rbs zones are made up of the area between the highest hi, and highest close (swing hi,) lowest lo, and lowest close (swing lo) of the candles in the obvious previous price swing....when retested by the current prevailing price action as potential supp/res/sbr/rbs price tends to test deep in the zone.

 

[bbmac]

Thank you for all your guidance and advice and teachings. Still learning and losing money but I am sure I will slowly get the hang of it after much practice.

Happy new year to you and a prosperous New Year. Wishing you and your family the best of health.

Thank you, HNY and prosperity to you too.

 

[bbmac]

Would like to clarify a sentence you used:

If a Re-entry set-up on intermediate chart ...... it is best at a pre identified potential sbr/rbs area on the trend t/f, into the trend t/f(+) <-- What does it mean by Trend T/F (+)

Thanks

What I mean by this (+) is that the trend may be present on time frames above your own trend t/f, maing it a potentially stronger trend, but as we analyse price across 3 time frames, we are really only looking for trigger t/f re-entries at intermediate t/f potential sbr/rbs zones after a pullback in the intermediate t/f trend (+) -and- intermediate t/f re-entries at trend time frame potential sbr/rbs zones after a pullback in the trend t/f trend (+.)

If the trend exists on time frames above your own trend t/f and for example you see a re-entry set-up on your trend t/f, (likely to co-exist as a reversal set-up on the intermediate and trigger t/f's.) this trend t/f re-entry set-up would be better at potential sbr/rbs on the t/f above.

 

[babymush]

Hi

I read through your notes for the small charts. However could I just check, there are 3 extreme fibs levels..

When you said that the small charts support, what does it mean? It breached the 1st extreme fib level or the dochian level or the ascending fib tunnel?

Thanks

 

[bbmac]

Hi

I read through your notes for the small charts. However could I just check, there are 3 extreme fibs levels..

When you said that the small charts support, what does it mean? It breached the 1st extreme fib level or the dochian level or the ascending fib tunnel?

Thanks

Yeh, the optional small charts house 3 extreme fib tunnels, the fib channels and the donchian channel...so that....if you have a breech of one of the extreme fib tunnels and say a breech of the donchian channel and the fib channel that would provide extra technical confluence to a main chart set-up and 'support' your reasons for a market entry as all indicators on these optional small charts are such that they show overbought/extreme o/b, or oversold/extreme o/s
conditions.

There will be times when you see a 1min (trigger) main chart set-up but an imperfect or no 5min 'supporting' main chart set-up at pre-ident pot supp/res/sbr/rbs and the conditions on your small charts may 'support' a market entry or not in lieu of the 5min main chart.

 

[babymush]

Would like to check on the difference between Reversal A and Aii

Basically what I can see is that the only difference is the 4 Bols Flip and the 3 Bols Flip right?

If this is the case, Reversal A can happen with just a 3 Bols flip too since the 60 bols is not needed in this case.

Please assist.

 

[bbmac]

Would like to check on the difference between Reversal A and Aii

Basically what I can see is that the only difference is the 4 Bols Flip and the 3 Bols Flip right?

If this is the case, Reversal A can happen with just a 3 Bols flip too since the 60 bols is not needed in this case.

Please assist.

Yes that's right, a Rev Aii differs from a Rev A in that there is a 3 bol flip either inside the 60 bol or straddling it. Both a Rev A and Rev Aii therfore involve at least a 3bol flip and remember both set-ups can be with regular immediate or regular sequential divergence....at a pre-ident pot supp/res/sbr/rbs zone.

The following extracts have been lifted from the docs attached to this thread detailing the Trading System/Methodology;

* Reversal type A set-ups can occur with regular immediate or regular sequential divergence.
* Reversal type Aii set-ups tend to exhibit regular sequential divergence in the main, but can also occasionally exhibit regular immediate divergence.

In order to help memorise the Reversal set-ups it may be useful to use the following summary;

Oscillator extremes or required divergence with;

4 Bol flip [10/20/40/60]…………….. Reversal Extreme and Reversal type A

* On all other Reversal set-ups, a 4Bol flip first, then required divergence as;-

10Bol comes inside 20Bol……………………………………………..Reversal Extreme ii
10Bol comes inside 20 & 40Bol……………………………….……….. Reversal type B
10 & 20Bol now come inside 40 & 60Bol, and flip again…..Reversal type C
10 & 20 &40Bol come inside 60Bol and flip again...........Reversal type A ii

 

[babymush]

Would like to clarify a point with you:

It is advisable only to act upon a trigger time frame Reversal set-up that is not supported by any intermediate + time frame set-up, in an intermediate time frame range - not against a trend that exists beyond the intermediate time frame.

What does it mean to act in an intermediate time frame range? Not against a trend beyond?

 

[bbmac]

Would like to clarify a point with you:

It is advisable only to act upon a trigger time frame Reversal set-up that is not supported by any intermediate + time frame set-up, in an intermediate time frame range - not against a trend that exists beyond the intermediate time frame.

What does it mean to act in an intermediate time frame range? Not against a trend beyond?

Anyone reading the above might think we are overcomplicating things, lol, but of course it is important to know the highest probability overall price action circumstances under which the set-ups present themselves, both re-entries (to trend after a pullback) and in the case of your question, reversal (against trend) set-up.

Specifically re your question; if you see a trend is present on your intermediate and trend time frames (per overall price action-classic peak/trough analysis) and even beyond, a trigger t/f reversal set-up on it's own is likely to indicate a small pullback only. If that trigger t/f reversal set-up is supported by an intermediate t/f reversal set-up then that pullback is likely to be deeper and therefore more trade-able.

If the intermediate chart is ranging (per overall price action-classic peak/trough analysis) then a trigger t/f reversal set-up is effectively just playing the random oscillations/noise within the range on the next t/f and therefore higher in probability of a successful outcome than trying to trade 'against trend' that exists on t/f's above that.

If using the optional small charts remember to glance at these too to assess whether o/b o/s / extreme o/b, o/s conditions exist too on the t/f's concerned, in such situations.

 

[bbmac]

Good example of point made in post above (#339)

Gbpusd this London morning session, an obviously ranging 5min chart develops, see screenshot below;

Then a 1min Reversal set-up presents itself re the point in post above., this set-up alone without a 5min supporting set-up in a trend that existed beyond the 5min chart might not have been as high a probability as in a 5min range...see below;