This is a follow-up discussion regarding materials covered during my participation in the recent workshop with Chris Lori. There were many great topics discussed though I found this area to be particularly relevant to everything we cover here. Please note that there are mentions of a couple price movements that some of you might not yet be familiar with, and they will be covered in greater detail in the new site. If you have any questions in regards to particular strategy, please be patient and rest assured they will be covered in the future. I am aware that attendees are the only ones that have seen some of this info from me thus far.

Chris also has many materials in which similar strategies/like patterns are already discussed, ready for viewing, if you prefer. You can access his site by clicking here. In the video, I reference 2 other articles on this site as well as one section...here are the links to those:

http://www.nobrainertrades.com/2010/05/all-about-diagonal-trendlines.html

http://www.nobrainertrades.com/2010/05/brushing-up-on-chart-patterns.html

http://www.nobrainertrades.com/search/label/PPTS%20Main

Main Points:

• Price trades above a key area, buyers keep buying, price trades below a key area, sellers keep selling

• Look for congregation or blocks of order flow and then confirm movement through subsequent activity

• Be aware: draw trendlines and understand how they are being used on but a long and shorter term basis; everything happens for a reason

• Watch price around certain times of day: 1. what price is doing leading into it and 2.what happens at that approximate time

• Boot pattern is caused by a spike/drive lower or higher; at the base or top a local significant high/low causes the consolidation

• Use price symmetry to determine feasible price exhaustion points to avoid getting eliminated on premature fades

A web miniseries; something to watch while we wait for the saga to unfold ourselves and the creator has more to come. To be continued...

Episode 1:

Episode 2:

Episode 3:

Created by NOMINT

Main Points:

• Pay attention to higher/lower lows and highs (swing points) to assess the future direction of price.

• A swing point is defined as: low surrounded by higher lows on each side, or, a high surrounded by lower highs on each side, though I stress you look at the bigger picture and connect these highs and lows with your eyes only, not solely on this objective reference.

• Note the daily macro trend, and find confluence points on where to possibly reenter/ride it out.

• Note the 50% mark on you last major swing; this is a general reference only. Sometimes these fades will occur previous or slightly lower than this level (61.8%, etc), but the most important requirement is confluence points (horizontal support and resistance) found in the middle of your range. Should price follow through or fail, you are typically in a good position to at least lock-in at breakeven in the even of a false follow-through. Additionally, monitor price steepness and the longer term macro trend leading into it.....probably the most important facet of this.
  

• As usual, macroeconomic/geopolitical events, etc, could wipe out all of this, so pay attention to streaming news sources.

• As a reference, here's the link to the original Quasi Pattern article: http://www.nobrainertrades.com/2009/06/over-and-under-pattern.html

Major points:

Different market environments call for different 'types' of trades. Keep a folder on you computer with screenshots, marked up with key areas and notes of what you did right/wrong or missed alltogether. Be prepared for the next time around.

On 'heavy' price action, after an area has already faded, dont look to fade, but rather breakout. This is true on most timeframes.

Look for slow and steady price action leading up to a key area that has yet to be faded to sell or buy against the shorter term trend.

When you are expecting a breakout of an area, try to get in before the breakout occurs. This allows you to put a stop in at breakeven and never go 'in the red' on the initial pullback. This is particularly helpful if the breakout occurs shortly before a news announcement, etc.

To determine reversal points in an uptrend, look at price action on the last move down.

Look for confluence of diagonal trendlines and horizontal support/resistance or fib levels.

On breakouts of major areas, expect the move to be big, and go for the long haul.

Article about bucket patterns here: http://nobrainertrades.blogspot.com/2008/10/bottom-of-bucket.html

There's a small delay in this video here between voice and video just so you're aware.

October 12, 2008

Using GBP/USD....