Pimpology Lives On - Intensive Care for Newbies - page 6
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Types of Trade to look for
Good morning all.
I hope you've all had a nice weekend.
We're almost at the end of the intensive care classes so later on in the week we can look at some set-ups to get involved in after a couple of days of questions and answers.
I will get round to everyone in time. I am just wanting to finish this off without toooooooooo much distraction.
So, without further adieu lets look at the different trades we take.
There are about 6 or 7 in all, some geared towards novices, some for intermediates and some for degenerate gamblers so let me cover all of them in this lesson.
Our main type of play is the Breakout which essentially does exactly what it says on the tin.
It's a break of either resistance or support, either through a diagonal or horizontal trendline.
The horizontal breaks are better as they are breaks that are either making new highs or lows with numerous big players having orders set at certain levels.
There are the occasions when we have false breakouts, but with the fast EMA that runs through the candles near to the break point, these falsies can often be avoided.
You need to ignore the CCI trigger for these plays yet ensure the two main CCI's are not overbought or oversold when entering.
The second type of trade is the 1-2-3, which is the confirmation of the breakout.
We wait for the break (1), then the next top/bottom (2) then the retracement to the old support/resistance just broken (3) then hit it on the trigger providing two main CCI's are not overbought/oversold.
The third type of trade we look for is the BOX.
Primarily we refer to our two bold main movong averages when talking about the box.
On a 60m chart for example, if the price is wedged between the 4hr 20/50, that's the Box and an area of either consolidation or a big reversal.
We must wait for either the 20 or 50 to break to gain an indication of the next direction but we can successfully play this box if we are careful as it's often an area of indecision.
There are 3 variations of this trade, called the KISS. A slightly more dangerous yet less financial risk version, a less dangerous but more risk version and a combination of the 2.
The first allows us to wait for the retracement in say a downward trend on a 60m chart as far up as the 20ema. Once it kisses that we go short again as the 20ema should be resistance.
The trigger will be up at this stage.
The second is to wait for the kiss and for the trigger to start heading down again. Upon the cross of the 0.0 of the trigger that's where we enter.
This requires more of a stop loss but is generally more reliable.
The third is a combination of both. You take half a position on the kiss & half on the crossover of the trigger, averaging your entry price and thus your risk.
The final type is double/treble tops/bottoms.
We go in the opposite direction to the current trend upon a previous high/low being reached with a stop just the other side.
These, in my opinion are the most risky as in success rate, but the financial risk can be quite small.
Please take a look at the screenshots below.
Pic 1 is the breakout.
Pic 2 is the 1-2-3.
Pic 3 is the Box.
Pic 4 is the Kiss. (Shown on 5m chart for clarity)
Pic 5 is double tops/bottoms (5m chart best for scalping on these)
That little lot should keep you going for a while. Try these on a demo account until you are familiar with them.
Backtest Backtest Backtest. Not perfect but a good place to begine to understand the types of trade you can maximise on.
Next we'll cover targets and taking profit in the last lesson before we put it all together.
Good luck
I wanted to draw all the MAs as mentioned by you in the above quoted two posts...Just confirming whether following are correct
For 60 m chart
5 EMA
20 EMA
80 EMA (4hr 20 ema)
480 EMA(daily 20 ema)
50 SMA
200 SMA(4 hr 50 sma)
1200 SMA(daily 50 sma)
for 5 m chart
4 EMA
20 EMA
60 EMA(15 m 20 ema)
240 EMA(60 m 20 ema)
960 EMA(4 hr 20 ema)
50 SMA
150 SMA (15 m 50 sma)
600 SMA (60 m 50 sma)
2400 SMA (4 hr 50 sma)
Kindly let me know whether this is correct or not so that I can draw the relevant MAs.
ThanksPerfect !!!!
Look at the two snapshots below.
The 1st is demonstrating the 5/20/50 stacked in correct order, one for long and one for short on a 60m chart. (please ignore trianglular chart patter)
The 2nd shows a crossover on a 5m chart, which usually indicates a reversal. Once again, we are looking for the correct order ma's stacked neatly, 4/20/60
Whether this is 4/20/60 on 5m chart or 5/20/50 on the 60m chart. These will become your most reliable friends once you master how they work!
If I am reading correctly...this means the following:
on 60 m chart, order is 5ema,20ema & 50 sma
on 5 m chart , order is 4ema,20ema & 60 ema
as in on 60 m chart we use a SMA as compared to a 5 m chart where we use an EMA as the highest order MA to stack up..
Thanks a lot for your lessons..
sma50
Hello Zak,
just wont to ask you if you still have 50SMA on your 5M chart.
seems to me there is only 4ema, 20 ema,(60ema,150 sma=from15TF)...etc..not 50sma
If I am reading correctly...this means the following:
on 60 m chart, order is 5ema,20ema & 50 sma
on 5 m chart , order is 4ema,20ema & 60 ema
as in on 60 m chart we use a SMA as compared to a 5 m chart where we use an EMA as the highest order MA to stack up..
Thanks a lot for your lessons..5m chart we ideally want 4/20/60/150. 150 being 15m 50sma, but minimum requirement is 4/20/60 but 60m is correct, well done!
Hello Zak,
just wont to ask you if you still have 50SMA on your 5M chart.
seems to me there is only 4ema, 20 ema,(60ema,150 sma=from15TF)...etc..not 50smaNo, we don't need a 5m 50sma. It gets in the way. Tried it in previous thread but it's just not viable.
I hope this helps.
Entries
Good morning all.
this is the penultimate lesson prior to getting stuck into some decent trades so please bear with it. Re-read all the lessons a couple of times, back-test your newfound knowledge, then ask questions.
I will be available very soon on Skype to answer all your questions in real-time so add FX Pimp (zaklloyd) to your skype contacts if you would like to participate.
OK, so on to entries.
what am I looking for and what should you look for when playing these 2 timeframes?
The simple answer is that to make a decent amount of money safely you must follow a few guidelines. I will outline these guidelines shortly but just so you know, when starting out the set-up must be there on the 60m chart before looking at the 5m.
Once you are more experienced you can scalp off the 5m chart too but 100-200 pips is always going to be easier in one trade opposed to 10 trades off a 5m chart for 10 or 20 pips.
I want you to make money from this and this is the best way of doing it.
Beginners should only play breakouts and 1-2-3's, and should not attempt the BOX, the KISS or the REVERSALS.
We'll move on to these later, but for now we just want to play breaks and continuations, which I will cover now.....
For these plays certain criteria must be met....
(60m Chart, based on long plays. Opposites apply for shorts)
1) 4hr 20 must be above 4hr 50 and in close proximity.
2) 60m 20 must be above the 60m 50 and in close proximity.
3) 15m 20 (5ema) must be above the 20 or crossing.
3) 21CCI must be positive and not overbought. ie. not over the 150 level.
4) 84CCI must be positive and not overbought. ie. not over the 150 level.
Once we have all these criteria in place we can look for break of support or resistance or look for the continuation or 1-2-3 play.
If we are playing a breakout we must wait for the 5ema to get as close as possible to the break area to ensure the momentum is there.
If we are playing a 1-2-3 we must ensure the trigger is crossing.
Let me show you a couple of examples just on a 60m chart to start which show how to play the crosses of the 60m 21CCI, then I will come back with the 5m version in a second post with some fresh criteria to look out for.
Break 1-2-3
Once we have a breakout on the 60m chart, in order to preserve your capital and to use a tighter stop loss we use the 5m chart and 123 method.
Switch to the 5m chart as the break happens wait for the break to happen, wait for a small retracement and for the trigger to retrace too. This should in-turn see the 63 CCI move to a suitable level then hit it as the trigger CCI crosses back above the 0.0 line.
Pretty simple and avoids a lot of false breaks.
Finally, in the next - and final - chapter we will cover exits and targets before putting it all together commencing after the Easter holiday.
This will give you some homework until then. just re-read and ask questions.
Next week we will take some trades!
Wondering
What are the times your in front of the computer in NY/EST time? I am assuming 3 am until 12 noon.
I only really trade London open and New York open.
I run a live-room session for New York at 1:15pm BST, which would be 7:15am there where you are and my colleague runs London at 7am BST which would be 2am there.
Both sessions are just 90 minutes long so I do 3hrs of trading on short-term book for 50-100 pips per session, then spend an hour studying longer-term charts for position/swing trading, which would usually give me an additional 500 or more pips per week.
For this 60m/5m strategy just 2 x 90mins is fine, and you'll keep fresh.
Too many times I have seen people make 50 in the morning, 50 in the afternoon then go it alone in the evening and lose 200 trading Dow futures or Nynex crude !
That's greed for you!!
Trend lines
Hello all,
These articles are truly great. best tutorial I have seen.
Can someone please show me how to draw short trendlines. I am pulling out my hair trying to draw them in Meta trader. mine always cross the screen from the start point to the border but I want to be able to draw 3 - 5 inch lines similar to those FX has on his charts.
Help Help Help, otherwise would need a hair transplant.