Good evening everyone.
The first thing I want you to know is that I didn't develop this system. I just have made it a little more convenient for myself.
Here is the explanation of the system I use.
1) Main pairs
I trade GBPUSD and EURUSD only, but I use also AUDUSD, USDCHF, USDJPY and USDCAD (these pairs are called "Allies") to watch the main movement of the USD.
2) Main TF (Time Frames)
I use intraday system, so my main TFs are M1, M5, M15. I watch H1 - D1 to understand the whole movement.
3) Working periods
The best time to trade is from 6 to 10 (GMT) and from 13 to 17 (GMT). There are session crossings at these time periods: 6-10 Asian and European sessions, 13-17 European and American sessions.
4) Indicators
ZigZag, MACD (5-34-5), Fractal, 4 MAs with the following periods 5, 21, 55, 233, Fibo grids.
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Before the every session I analyze current situation: I count Elliot waves, define support and resistances levels, watch the movement of the allies.
At the beginning of the every session usually we can see a flat. I begin to plan my trades after the breaking of its levels.
How to recognize the real break
Quote:
Take a look at the picture
http://bp0.blogger.com/_Sv1U9q9koZU/...26+-+gbp02.gif
I know that a lot of newbies have problems with the recognition of the real break. At this picture we could see how powerful resistance level was broken.
My comments.
At 3:30 (M5 GMT) the price tried to break this level for the first time, but it didn't manage to do so though. After a little time we could see the first break up to 2.0536. Remember, we mustn't open the trade at once, when level was broken for the first time! As you can see, the price had rolled back and only after it returned, the price has managed to fix under this resistance level, AND then resistance has become a support! Please, remember this thing, because it is the main point here. Price had bounced from this new support level, and we could open a trade.
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Fractals and ZigZag help me to understand the direction of the movement.
The main instrument to define support/resistance levels for the next session is Fibo grid. I try to define Elliot waves on the chart, and then I place Fibo on one of these (usually on the 1st impulse wave, on the correction and so on - it all depends on the current situation). On each morning I place Dow Jones levels on my charts. The fact is that usually my levels are very close to DJ's, but I define them 12 hours earlier.
Sometimes I have some kind of a gap between my and DJ's levels. Then I will place my trades on the basis of both.
Then I watch those levels, that I marked out.
I use fractals to define stop loss levels.
For example yesterday movement:
Quote:
Take a look at the rectangle. As you can see there were 4 false breakouts of the max level. After that this level was broken with the one powerful movement, and only at this point we could open a trade. Also I marked out stop level: according to the system, I use, it must be placed a little bellow the previous fractal.
http://bp2.blogger.com/_Sv1U9q9koZU/...09+-+gbp01.gif
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I use so many MA to define current trend vector.
Also 233 MA is a very good support/resistance level.
Here is an example, also yesterday movement:
Quote:
Here you can see the reason why I use this heavy black MA (233).
I have marked out four regions, where MA has become a good support for the price. Also you can see that this heavy MA had ascending movement curing the whole period.
http://bp2.blogger.com/_Sv1U9q9koZU/...09+-+gbp02.gif
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All quotes were taken from The Uncommon Trading In My Life
It is all for now. On weekend I will post here the rest of my explanation, all my indicators and my template for Metatrader 4.
Also I will explain a lot of things during our discussion at this thread and at my blog. I will gladly answer to any of your questions via E-mail or ICQ as well.
Send me messages at
nthint@yahoo.com
I look forward to see you soon!
Anthony Schneider.