Kolachi Method of Trading - page 91
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You can see that price reacted at point1.It depends the lot size you trade. If you enter with 1 standard lot then 20 or 30 pips are enough for me for living. If you trade smaller lot size i.e 0.1 lots or 0.2 lots there is not other way than follow the trend at least up to 2/3 of it. Back to the chart now i see that previous bar closed over 4H Bollinger. Thus sooner or later price will move higher. The best buy enter for me is when price touch resistence 1 and 5wma/200ema regards
See this my problem with Bollingers. One time they're supposed to be support/resistance for price to bounce from, next time they signal a move/trend if they are are broken??? It seems they could be either therefore I cannot understand the power of them? If you have time, please could you explain?
Many thanks for your wonderful contributions zacharakis!!
Ogie
Weekly Performance
Month: May 2010
Week: 21-28th day
Pips Performance: +768 pips
Eq. Change (week): +7.25%
Eq. Change (2009-2010): +184.32%
kulache
Following is the chart of few recent trades in aussie, resulting in +80 pips.
kulache
Buy eu 1.2300 SL1.2260 TP 1.2500
good luck
Hi Ogie,
Sorry for the late response.
Main trend is bearish (seems clearly in daily,weekly charts). In hourly chart it seems from the place of these three MA. 55<100100>200 in any TF so if we enter buy based on slope change of 5wmma or on rebound on supports/trendlines we must take very care our profit targets expecting most of times sharp reversals.
2. Of course price was stucked into the diplomatc channel but 5wma was rebount to 55ema and crossed 100ema so the explosion up to resistence 2 was very possible. To wait 21 to cross 100 would be too late. You are right but you saw when this was happened price was alredy to 1.2450. I used to see right in time of slope of 5wma the behavior of 21ema to other emas
3. Regarding Bollingers i agree with you. I dont believe that there is anyone out there who trade BB with success but sometimes they offer supports or resistances as you said realy good especially when outer bands are near to 55 or 100 or 200 or strong trendlines/supports.
In hourly chart you can see the white vertical line and the cross point of two trendlines and the support 1. If the price will go to this point1 before the time shown from white line then i will go long without waiting the 5wma slope. This time price also will be near or touched 4H lower Bollinger. My target will be upper 4H Boll., as 21ema should be ready for rebound by 55 or 100. If price penetrates above mentioned trendlines then these should be resistances and i believe that price will go lower to test again lows at support 2.
Regards
ZacharakisVery good powerful analysis. I am learning Kolachi myself and have learned the basics of candles and trendlines/horizontal lines which seem to support the Kolachi method really really well. It seems when Kolachi signal and support or resistance all meet together at same time then it gives great high probability entries/exits.Just one thing I don't understand from your reply: you said:"B. Target was for me maximum 1.2500 (point2)becouse:1. 55ema<100ema<200ema 2. Point2 was the cross point of a trendline and the aqua resist line" - why would the fact the 55/100/200 were in that order affect your target level? I don't understand this.The only thing I don't use that you use is the 4hr Bollingers. I have never trusted Bollinger Bands, they are ok in a range market but useless I feel in trends. I do see how they supported this trade, but they're not for me I think. But regarding everything else, I take heart in the fact I was analysing charts the same way you have been, so I know I'm on right track!!One thing though: from your 1HR chart it's clear that maybe we should have waited just a little longer before entering long as the 21 had bounced up from 55 like you said, but it was stuck under the 100 still, price was approaching the 200 axis (stuck in a diplomatic channel) and then the 55 was going to have to face the 100 at some point soon. For me, I would have waited for price to break the axis (and therefore break the channel) and the 21 to break the 100. THen I would expect a pullback by price back the axis to allow 5/21 to catch up a bit ... which is what it is doing right now as I type this!!That's my take - I'm still a newbie but Kolachi seems to fit my brain very well!!Ogie
Zacharakis
Thanks for another great reply!
Ok, so I'm glad I am not alone in not really believing in Bollingers, but Kolachi I really do believe in.
Just said the daily/weekly trend was down, how do you normally analyse that? Is it with the WMA5 and the EMA21? I think these 2 lines alone can probably tell us the trend direction AND STRENGTH perhaps? Eg, if both pointing down with a widening gap between them, it's obviously down. But if the 21EMA is down with the 5WMA going slightly upward to meet it, we perhaps could say overall bearish but bullish correction? Is this roughly how you analysis "trend" in a higher timeframe?
Also, sorry for the questions, but I'm really trying to learn!! On that 1hr chart you said if price hits the area before the time line you will enter long without waiting for slope. I understand trying to "get in early" before the slope change is a skill to be mastered over time. Am I right in thinking the vertical time line you put on your chart was based on the intersection of the 2 trendlines? And therefore if price takes too long to reach that area then the setup is ruined?
Thanks again for your great help.
The reason I said maybe it was best to wait for the break of the 21 and 100 was because I look at a slightly longer term view than I think you do, I like to see EMAs cross to signal price may continue on the whole in that direction, then I like to see a pullback. I do understand the long signal you showed us was a shorter-term play up to a resistance area. Great call!!
Ogie (thinking of joing KPF!!)
Dear Ogie,
Please look at monthly chart. We can see how sharply last bar penetrated TL1 and TL2 as well as 100ema. Please dont forget that we speak for monthly bars. Imagine now that this chart is not monthly but lets say 15m chart and you were into the market selling this pair. What would be your profit target? My opinion is that in long term we will see eu near 1:1 but as our trading TF is 1H chart aqua area is a strong resistence. Please note that price is on 200ema and a bit higher of TL3 and monthly support 1.1950. I expect a reaction in this area (1.2200-1.1950) up to at least 1.2700 with max 1.3100 before proceeding to further lower levels (monthly chart). According to this , we move on to hourly chart and try to catch a turning point based on supports/TLs/slope of 5wma
Regarding your quest for white vertical : yes it is the intersection of 2 TLs but be carefull. If price cross down these TLs before the white line time then the buy chance at this point is not valid. Of course a SL of at least 50pips is necessary at this time.
I dont know if my reply satisfied you
regards
ZacharakisThanks for another great reply!Ok, so I'm glad I am not alone in not really believing in Bollingers, but Kolachi I really do believe in.Just said the daily/weekly trend was down, how do you normally analyse that? Is it with the WMA5 and the EMA21? I think these 2 lines alone can probably tell us the trend direction AND STRENGTH perhaps? Eg, if both pointing down with a widening gap between them, it's obviously down. But if the 21EMA is down with the 5WMA going slightly upward to meet it, we perhaps could say overall bearish but bullish correction? Is this roughly how you analysis "trend" in a higher timeframe?Also, sorry for the questions, but I'm really trying to learn!! On that 1hr chart you said if price hits the area before the time line you will enter long without waiting for slope. I understand trying to "get in early" before the slope change is a skill to be mastered over time. Am I right in thinking the vertical time line you put on your chart was based on the intersection of the 2 trendlines? And therefore if price takes too long to reach that area then the setup is ruined?Thanks again for your great help.The reason I said maybe it was best to wait for the break of the 21 and 100 was because I look at a slightly longer term view than I think you do, I like to see EMAs cross to signal price may continue on the whole in that direction, then I like to see a pullback. I do understand the long signal you showed us was a shorter-term play up to a resistance area. Great call!!Ogie (thinking of joing KPF!!)
Zacharakis
As ever, your reply is fantastic, thank you!
So basically we should just use Kolachi analysis on any sensible higher timeframe like daily/weekly/monthly to get a feel for where price may go longer term then enter using Kolachi analysis on a smaller intraday chart like 1hour, 5minute, whatever we want right?
I am starting to see there is no fixed rule to the timeframes we analyse, we just do whatever feels right to get a good idea of where the market is going, but we must stick to trading the timeframes we are looking at and not confuse ourselves with too many, right?
Seems logical and profitable.
Thanks
Ogie
Sell gbpusd 1.4538 TP 1.4330
Good luck
Trade closed manually at 1.4455 +85pips.
Back to eu now. This pair has dropped into a wide resistence area according to monthly chart (1.2100-1.1950). We will try to catch the sharp reversal which comes soon based on 5wma slope change.
regards
Sell gbpusd 1.4538 TP 1.4330 Good luck