Journal Take 2 - Chart Patterns

[natureboy]

B/E on GBPUSD Waiting on the EURUSD to pop to the upside here..

 

[natureboy]

EURUSD weakness here.. time target coincided with the support TL, yet no convincing reaction yet.. looks like support on 5m, lots of shadows at 1.2966.. i'm waiting for the break above 1.2984 before getting long again..

 

[natureboy]

Ok, finally, automating longs on EURUSD again. Timing helped zero today. If instead, the rate turns around and gets under 1.2956 then i'll need to review higher timeframes again as the support TL would be broken

 

[natureboy]

Aish.. Doing it all wrong today. Cut my winner (GBPUSD),..keep messing with a situation that has yet to manifest (EURUSD)..so far i'm down just under 3% today.. i make money on balance, but i need to clear my head.

 

[natureboy]

All right - Back Again

Today was a late start. Sat down to find EURUSD with strength (currency meter) conditions favoring a short in the time window for the GBP releases at 430. Velocity, slope, of the lines favored EURUSD selection at 245.

Currently selling down to 1.2910 area... though trailing..



Apologies for missing the pattern real time.. keeping this journal is a mental task, and somedays are easier than others..

 

[natureboy]

Closed EURUSD trade for now.

 

[natureboy]

I know its hindsight..

Here are ABCD patterns on a 20 second chart, potential entries into that trend



Time Model is making no sense right now. It works beautifully at times, then gets all out of sync and i have to not use it for a few days to a couple weeks, then it comes back and works great again.

 

[natureboy]

All right folks, the current retracement in EURUSD is in the form of a W5, which means a continuation of the down move is likely. We'll see what happens here. A 20% retracement of the A-D range of the pattern can be used to trigger short entry..

 

[natureboy]

Not liking PA right here.. bullish close on 1m



may still work, who knows. Sometimes there is a small pattern first that fails, then a larger pattern that actually leads to continuation

 

[natureboy]

The trend ID is bearish under 1.2943 in EURUSD. Momentum is shifted up, though that happens during corrections..

 

[natureboy]

Ok, larger pattern as mentioned. Still haven't gotten to that potential resistance TL, though..

 

[natureboy]

Upside momentum just killing the short concept here..1m close above 1.2940 its no good. Its at the TL. Strength is bullish, so shorts are not allowed by my day system. This is more a tinkering trade..

 

[natureboy]

Below 1.2920, there could be a push to 1.2880



So, not counting the patterns from the trend, looking at these attempts at a larger retracement entry, there were 2 stop outs. A third entry so far is working. This is not the strategy i use exactly, its just for demonstration. So minus 2R from first two, this final attempt has a 6 pip+1 pip spread 7 pip SL. We'd need to make 14 pips just to be breakeven on trying here. So far +10..

 

[natureboy]

If 1.2880 hit, it would make 8.1 Reward to Risk on last entry. So you can see how even though you'd be down 2R, that last +8 will still net you +6.

Of course.. target must be hit for all that to happen.

 

[natureboy]

Whether the trade works or not this time, if you test this type of setup out over 100 examples or so, it looks good.

This particular trade.. not looking as good, no. Deep retracement here..break of resistance TL.. can still work when this happens, though less likely

 

[natureboy]

Also, a probably obvious aside - you can use indicators like Slow Stochastic for pattern entry instead of a % retracement. Using the patterns for scalping (smaller targets) is another attractive idea. I've been meaning to put together some backtest results for you folks, i aim to get some up here soon.

You must evaluate any approach over hundreds of trades over different markets and behaviors. Its likely that somewhat different strategy is needed to maximize risk adjusted return in different volatility conditions.

 

[natureboy]

short trade went over like a Lead balloon

 

[natureboy]

Late as hell guys, here's what finally broke with the EURUSD.



So you can see - 3 failed attempts with smaller patterns (3R)
Final Pattern provided +7R (a little over) so far..

+4R is still good, even with one day accuracy of 25%! Over larger sample size, the accuracy can be much higher (especially with good context)

I'll get some real time setups WRF.. At least in hindsight its clear that the approach has merit..

 

[natureboy]

Good Morning or whatever time of day it is where you are

Two things on the immediate agenda
1) Current Setup i'm looking at
2) Return to look at 4hr/Daily situation on EURUSD



This pattern is present, and strength is in position to turn down - but has yet to turn down. So i'm waiting a clear signal that more selling is happening from the meter.

 

[natureboy]

Anyone see the pattern here?