Careful Trading inside of Consolidation

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I would like to thanks for your very very important information. I hope that I will be carefully doing my trading

thanks again

 

....Consolidation often means different things to each trader. Consolidation can occur on a small time frame yet still show a trend in place on the larger time frames such as the four hour or daily charts. However when there is consolidation that appears even on the four hour or daily charts, its time to be careful. Very careful......

One thing is 100% sure, price has 3 possibilitys, go up, go down or go side ways.

If you decide to trade with a trend following system then you need to realize that you will encounter 1 of the 3 possibilitys. Meaning that if your system decided to go long then you will loos when it goes back down or you will loos if it consolidates and you can only win when it goes the right direction (up).

If you trade a consolidating system then you have only 2 possibilitys. Or it moves sideways and you make money. Only the moment it breaks out (up or down does not matter) you will loos. Meaning you have 1 element less to worry about....

I hope you catch my drift.

In short and the way I see it and trade it, if I need to enter a trade and need to worry about 2 situations that can cause losses ( consolidation or the wrong direction) OR only 1 situation that can cause losses (the breaking out and does not matter which direction) then as a statisticus I prefer taking in the trade with only 1 wrong situation to worry about.

Friendly regards... FXiGoR

 
upshotsignals:
Consolidation is perhaps one of the most confusing and challenging trading environments.

Hi upshotsignals,

I couldn't figure out if you consider consolidation the same thing as ranging, like most books do, but if you do, then I can tell you, as a begineer, that I feel much more comfortable in consolidations than in trends like September's 2010.

Consolidations obey rules, while trends don't, at least in my strategy's point of view. In trends your only chance is to post a trade now and close it one month later, if you have luck to have a constant trend.

In consolidations there are rules wich are rarely broken, for example atraction to a former support or resistance level.

In trends you are never sure if the market makes a turn or goes on.

 

i'm waiting for the examples

 
primera:
i'm waiting for the examples

The examples could be your own.

Open Metatrader 4.

Open EuroUsd, any month but not September 2010.

Say august.

Find a period where there is consolidation,let's say 11 aug -13 aug.

Find two succesiv pivots in a uptrend, meaning that the first pivot is lower than second. Ok, if you found that, than see what happened with the line connecting those two pivots. I bet it is penetrated lately, isn't it ? I don't know, you tell me, i am only guessing what I am writing now. It is a principle I observed in consolidations.

If you choose a downtrend pivots then please connect the tops of swings, the principle is the same.

P.S.

To speak the same language, please set the timeframe to M5 or M15. Ok, Maximum to M30, zoom minimum. That's what I call intraday trading.

But, I am only a beginner, you should not trust me, in fact you should not trust anybody, especially brokers.

 

after my test

I could tell you that it won't worth it

I got a daily indicator that would mark the price level, every day , at exactly the SAME GMT time

in historic chart, it make perfect sense

all the candle in 30M or 1 H time frame, just touch it as it seem to be DIVISION LINE (predict that one day in advance)

but when you trade with it, there is some micro-volatility within 1 candle

the price FREEZE at (un) in-convenient level for a long time , then in a few seconds, it move 40 pips , then your -45 pip SL will get hit

but eventually , you could still be right about the ultimate direction

and the indicator still look perfect in the HISTORICAL chart, a day later (no repaint issue in that indicator , impossible that it repaint)

--->> if you want that useless indicator , let me know, I will put it here, this weekend -- good for MAJOR pairs

RIDDLE -- why a computer mouse with a brand name bluemagic that got wireless connection does not always work

I found one improvement in my BROKER, on firday AU movement during news, my broker get me LOSS , while my charting demo (alpari demo mt4) show that my broker do some update on their progressive improvement in their new price router

i.e. they swallow 10 or more pips on friday (their price shooter, it shoots more than it should -- 10 is quite a lot!!, and they improve their program for price given , on purpose and knowingly), one of my trans for AUD, and I suppose to do better with the charting broker instead

I kind of understand their NEW IMPROVEMENT during fast movement or news time == for their continue upgrade of their system to protect their INTEREST

but don't wanna to complaint about it -- too much fuss

----> if you are interest to protect your interest, make a youtube.com compatible video

whenever you entry or exit plus NEWS too , then your broker probably accept your complaint and refund to you

imagine forex pricing as e-vapour-ization (physics phenomenon ) , this way, we could understand it better and get better winning chance or break -even chance or if you like marine biology, octopus got 3 forms of swimming, avoid predator mode, getting prey mode and ink squeeze hibernation mode

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