XO_Method REVISED - page 51
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Yesterday afternoon's entry............
After such a major run, I tend to wait for confirmation of the price breaking at least the 60-EMA and with enough evidence from the RSis to show either divergence or the H1 and H4-RSi-setups, giving the clue.
I waited for the announcement unlike Suk as that announcement could have taken you deep "south" and you would have been in serious trouble. So I err on the caution side and took the opportunity when the candle @ 16h05 turned Long and closed above the 34-EMA. (regretably my UPS crashed during the night and my charts do not show the correct reading of the H1-RSi cross, but believe me. it was correct although the H4-RSi-setup was NOT Long yet. Made +18 pips here when the price bounced off the Fiblevel.
Next entry was @ 16h55 candle @ 1.9637 and exit on overheating CCi-5 @ 1.9671 @ 17h35 candle for +34 pips.
A lot more "messy" perhaps than Suk's trade, but "save enough" for newbies to trade and not feel "anxious".
Any comments? Please???
detailed explanation my interp of triple bottom
I do not agree with your reading of the triple bottom on the H4-chart. That is not a triple bottom according to the description given me and on the web for what a triple bottom is; but that is besides the point.
For me it is a triple bottom but not the kind you see in text books. It is the testing of a same bottom that can be seen on 3 consequetive candlesticks, just as since the retrace I would call a double bottom (1.9614/1.9609 on H4)
On my diagram I am showing the M30 chart which gets rid of some noise. The reason I use H4 to show is it gets rid of all noise and shows a clear testing of the same bottom 3 times.
Without the ISM news it was a double bottom, but since the price rushed up after the ISM spike tested the bottom again, I call this a triple bottom. This spike was to take out stops and also to get traders to go short, but there was a stronger pattern in place (in my opinion) which is the double bottom/triple bottom. I see institutional traders as trading this pattern more than they would sell emotionally on the ISM above average figure in this instance.
The textbook double/triple bottom looks like the following:
Followed by my M30 which shows more clearly the H4 I highlighted blue above. Hope it helps explain my reasoning.
I would also say that these are more accurate for the higher timeframes (eg H4, Daily, Weekly) but I stand by them.
I agree completely with ValeoFX that best policy is NO TRADE during news. However if in this instance you traded it as a pure technical analyst trader with no notice of news, and traded the double bottom, with protective stop at about 1.9690 (a few points below the previous bottoms) it would have kept you in through the news.
Triple Bottom..............
Here is an example from "Incredible Charts" and although they only have the Triple Top, the same scenario applies for the Bottom:
Please note that they talk about "peaks and troughs" and there were no scope for "troughs" on the H4-chart - there were 3 consecutive candles, which does not validise the Triple Bottom description.
In your M30-chart that could be the case, but your reference was to the H4-chart and all I wanted to say was that Newbies must be aware that this is not a Triple Bottom on the H4-chart. That you read the re-trace correctly are cudos to you. My concern is just for the newly initiated trader to not lose any money.
Triple tops (or bottoms) are identified by three peaks (or troughs) of similar height.
I am unable to get their example copied here, but here is the link to the page:
http://www.incrediblecharts.com/technical/triple_tops.php
Best wishes.
Here is the buy point marked
1.9613 was therefore a good buy point (if a tad early) on the way up after the news. I sometimes wait until the candle body starts forming in the direction when I decide to trade these.
If you can explain why it is not valid in your books, ValeoFX, please do explain, because I have by no means mastered these trades. Thank you.
Today, similarly was a double bottom - nice long wick, nice test of similar bottom (where the : of 20:23 is on my chart below) ---however I traded long at 1.9670. I did not make many pips on it, because of the ambiguity I was seeing - RSI2 seemed overheated on H1 - This was a tough trade because I found severe ambiguity across timeframes, but long won out technically now and price is at 1.9611.
It is also a broader double bottom if you take the 3 candles I interpreted as triple bottom yesterday plus the double bottom today as 2 separate bottoms and now we have break above 1.9700 and I'm looking as to whether close will be above or below the magenta EMA on the H4 candle.
I noted also divergence on both RSI windows and CCI are moving in direction of the higher lows.
This afternoon's entry..........
First signal came at 13h40 with an immediate overheating CCi-5. We wait and 2 candles later the trade continues and we enter @ 1.9685.
The reason for this entry can be found in the H1-RSi set-up where the RSi-4 broke the RSi-8 2 candles prior to the entry at the same time as the CCi-5 overheated!! For the reason given above, we waited and see the RSi-2 bounced off the RSi-4 on the previous candle. On the rebound we entered. Still in the trade; now @ +47.
Happy hunting.
Terrific Opportunity (long GBP/USD)
After the news we had a spike low from the higher than expected ISM - but did it break the crucial 1.9596 support. Not at all. Therefore we have a killer triple bottom on the H4 and entry at 1.9613 for a cool 40 pips in about 20 minutes of trading time.
Notice also how the RSI 2 bounced off 4 on the H1 chart and the H4 is crossing. Without flaunting my ego, I think this was a great trade and a great use of ValeoFX system.
Look at the CCI overheat "hook from extremes" too...(H4) in addition, the H1 turbo CCI was peeking over the zero line and the XO was showing change in direction (half red, half green).
Even if you got in BEFORE the news in the long a protective stop just below 1.9595 would not have been triggered. and the technical analysis of go long still validated.
I've marked the triple bottom in blue. It was a dead cert IMHO. You can see the other things I mention, too. Enjoy!
M5 - CCI zero line reject, RSI cross - notice H1 RSI 2 bounce off 4 (third window)
H4 - Overheated RSI 2 crossing RSI 4. Beautifully overheated CCI hooking from extremes, triple bottom formation and well below the EMAs.
H1 - Notice XO changing state, Turbo CCI cross zero, overheated RSIs, RSI 2 cross 4 and 4 cross 14, 4 and 14 cross 30 also.
Could also look at this as doji reversal pattern also.
Wow, was going to ask if anyone thought a retrace was in order after the overheated CCI on H1...no need to ask now.
ValeoFX I appreciate your point now. I have been trading double tops/bottoms for some time now, so I know how to spot them on higher timeframes, but you are quite right really and there are no shortcuts anyway IMHO.
Hoping I really "got it" this time. This seems a similar setup to a previous post by ValeoFX and was good for 19pips (assuming 4 pip spread). May be more because it hasn't signalled an exit, but I'm a bit cautious regarding the overheating of H1 CCI and H1/H4 RSIs. Looking forward to comparing with ValeoFX's entry...
Short entry: 8a.m.
H1 entry this morning..................
Good morning all, on this slow NFP-Friday morning.
Here is the H1-chart showing you that at the close of the 08h00 candle, we could have gone short and therefore selecting an entry on the M5.
1. The previous candle touched the 100-EMA and retreated immediately. By the time it had closed, the ............
2.......RSi-2 had closed LOWER than the previous close; ALSO, the RSi-2 on H4-TF showed a clear divergence as it closed lower than the 05h00-candle at 7h00-candle and making a higher High.
3. Close of 08h00-candle we also see a ZLR on CCi and we are ready to short @ 09h00 as soon as M5 gives us the correct signal for short.
Admittedly it was not an easy ride down, but remember it is NFP-Friday and we expect slow trades.
Nevertheless, there were +30 pips for the taking this morning.
Best wishes.