Let's Talk Trading Set-Ups

AlexH149 said:
So do potential setups tend not to play out over weekends then? Since you mention it I've noticed this before.
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To exit on Friday and buy back in on Monday costs commissions.
I let it run overnights and weekends. With stops and take profits too of course.
 
RachelFX said:
GBPUSD is a very simple set-up using the 1.3 level.

Price broke through and is testing the resistance of 1.3 , simple and support and resistance opportunity.

No price action yet though for entry that i like.

View attachment 274542
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Its riding that 1.30 line very well at the moment not going to break or retest untill mid next week by the looks of it!
 
Anyone use Keltner channels ? They seem to have some supporters over Bollingers.
Are they any good ?
 
Pat494 said:
Anyone use Keltner channels ? They seem to have some supporters over Bollingers.
Are they any good ?
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They both have their uses but you need to understand the principles they work on.
Bollinger – channels based on standard deviation
Keltner – channels based on average true range (volatility proxy).

Neither is "better" than the other – they are both just tools which can be useful if you have a particular purpose in mind. I would suggest a detailed study of what they are and what they can be used for (investopaedia is a good start) and then you can decide if they are of use to your style of trading.

Bollinger bands are another one of myriad indicators and in the right circumstances can produce good results. I would suggest that one of their most apparently underrated uses is to measure the standard deviation of any particular variable you come across in your trading. In Metastock (I quote that because that's what I use and am familiar with) you can lay an indicator (Bollinger for instance) on to another indicator or variable – that's a very useful facility and presumably any worthwhile package would include it. So, eg. if you trade pullbacks, Bollinger's standard deviation can tell you "how much of a pullback" you are experiencing. That is useful information. (You could also achieve the same result by feeding data into a spreadsheet – but it's a lot more tedious). And of course, some traders may well be able to just look at the chart and make a good "gut feeling" assessment: but I like to deal in figures because they can be quantified and potential trades can be ranked! A good understanding of standard deviation and how to use it in trading has been a worthwhile investment in my experience - and Bollingers are an easy way to use it.
 
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0007 said:
They both have their uses but you need to understand the principles they work on.
Bollinger – channels based on standard deviation
Keltner – based on average true range (volatility proxy).

Neither is "better" than the other – they are both just tools which can be useful if you have a particular purpose in mind. I would suggest a detailed study of what they are and what they can be used for (investopaedia is a good start) and then you can decide if they are of use to your style of trading.

Bollinger bands are just another one of the myriad of indicators and in the right circumstances can produce good results. I would suggest that one of their most apparently underrated uses is to measure the standard deviation of any particular variable you come across in your trading. In Metastock (I quote that because that's what I use and am familiar with) you can lay an indicator (Bollinger for instance) on to another indicator or variable – that's a very useful facility and presumably any worthwhile package would include it. So, eg. if you trade pullbacks, Bollinger's standard deviation can tell you "how much of a pullback" you are experiencing. That is useful information. (You could also achieve the same result by feeding data into a spreadsheet – but it's a lot more tedious). And of course, some traders may well be able to just look at the chart and make a good "gut feeling" assessment: but I like to deal in figures because they can be quantified and potential trades can be ranked! A good understanding of standard deviation and how to use it in trading has been a worthwhile investment in my experience - and Bollingers are an easy way to use it.
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Goog knowledge share. Cheers.
 
momo3HC said:
Goog knowledge share. Cheers.
Click to expand...
I forgot to mention that one of the best explanations I've seen of how to use Bollingers is John Bollinger's book "Bollinger on Bollinger bands". He goes through all the usual stuff of how to use Bollinger bands –all well explained but it's available for free in other formats/forums (and he also does some good stuff on YouTube), so you might not want to pay good money for that even though it's well written and in my opinion worth it. But what is good about his book (and what I've not seen so well explained elsewhere) is his concept of standard deviation useage in trading. He covers two very important topics (1) how to use Bollinger standard deviation on other variables/indicators (as I've referred to at #185) and (2) how to "normalise" the results obtained at (1). If you have to pay for the book those two items alone are worth it.

For those unfamiliar with normalisation it's just a way of comparing different results against a meaningful yardstick. So for instance, you might have two similar-looking chart pullbacks, with say one stock price at $262 and the other at $85 (taking two examples I recently traded) and you want to know which has experienced the greatest %age pullback in relation to what is usual for each stock – this is where standard deviation kicks in. By using normalisation you can come up with a "score", say between 0 – 100 and make a valid comparison and thus hopefully trade the greatest potential - all other things being equal (which they may well not be). In the example quoted although the higher price is 3x the lower it has statistically a 7x greater pullback (even though both pullbacks look similar on the chart) and is therefore potentially more profitable.

The lessons I have drawn from this sort of thing are that trading is a probability game (amongst many other things) and you can use stats to give yourself the best trading opportunities. It's a lot of hard work to get it clear in your mind (unless you're very mathematically inclined) but it's worth it. I also think it's a lot more productive than flitting from system to system/indicator to indicator – my suggestion is to concentrate on one simple method and get it to work really well. When you've done that you can look at another one for a different trading situation e.g. when the current bull run comes to an end.
 
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Looking bearish on many GPP pairs, have taken an entry myself into GBPJPY this morning.

Simple break and retest of the trend line, with shooting star to enter. Looking for it to come down to around the 141.200 level

GBPJPY.png
 
A very volatile market open this week.

AUDUSD long position was stopped out of by the market gap at just above BE this weekend.

Will not be rushing into anything this week, and will re-analyse the charts later today/tomorrow to see see how things settle.

I also had a sneaky look at BTC over the weekend to see if it would push above the 9k mark, but it was short lived and dropped hard off this level.
BTCUSD.png
 
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