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Ian Coleman - First 4 Trading
Ian Coleman of First4Trading.net explains in a technical analysis of charts why he is trading EURUSD. Coleman is looking to sell EURUSD at 1.1660 with a stop at 1.1690. His target is 1.1565.
Squawk / 19 May 2016 at 18:50 GMT
Hypothesis Testing
United Kingdom
Caution any bullish cable traders. Strong bullish moves that subsequently close within the prior day trading ranges are more often stop running moves and the underlying trend returns to at the very least test support. For example look at the daily charts for the 14th and also 18th March or the 30th March or 12th April you get the idea. Large rates of change that stall can easilly be caused not by a true change of trend but more often a stop run !!
https://www.tradingfloor.com/posts/trading-between-a-roc-and-a-hard-place-7640410
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Neil D Neil D
Am shorting WTI here.............heavy Ichimoku clouds overhang the weekly and the hourly, so combined with the recent extensive upside move am taking a stance against the medium term trend!
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zefy zefy
In this kind of situation like in cable now, do you allow std dev algos to trade only short side?
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fxtime fxtime
zefy the std devs work due to the prior day distribution and thus are still trade-able however if you want to enhance the bias of the trade and make it more profitable/reliable then in a prior article I mentioned about looking at the most recent close price and comparing it to two days prior. Should we have a higher close two days ago than the most recent then look for impulse moves upwards and obviously vice versa. This additional indicator only takes advantage of dead cat bounces and any contra trend bounces and isn't in any way a positional trade. You can ofcourse enhance the trade further to a more aggressive skew to your trade which I think I posted elsewhere about using a 4pt stop and trade entry is 0.22 x prior day range added/subtracted to the close depending on the bias of the close seen two days ago as compared to the most recent close. Hope this makes sense? All the strategies should overlap to give a better trade entry for you.
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fxtime fxtime
Neil thx for the comments....I shorted and gained +50 yesterday on XOM and re-entered short at 89.20 so slighltly against me. Looking at prior Q2 and end of May periods over the years for XOM it usually has a change of trend starting in this period also my DMI and the ROC have turned.
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fxtime fxtime
Neil...EoD chart on XOM
However weekly chart shows ascending ADX but dmi+ has broken back down below it so the underlying trend is stalling and we should get a trade-able impulse down imho.
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zefy zefy
Thank you fxtime. Your comment perfectly answers my question about enhancing the bias.
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fxtime fxtime
I presume you profited yesterday on the std dev trade ? A nice reversion back into the 2nd std dev too !! So an easy drop trade and the bounce :-) I know Lad1 was trading on that too.
You are wise to seek an enhancement to the trade structure as we are seeing volatility slowly build.
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zefy zefy
Yep, recent days have been extremely good for std dev trades :)
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fxtime fxtime
So today we would have longed at 2046.3 seeking 2051.00 and the aggressive trade would have been long at 2045.00 with a 4pt stop. The latter closed for +4 (my usual target for the aggressive trade fwiw)...the basic trade is running long and slightly in profit so far.
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fxtime fxtime
Zefy...chart update for you. Trade completed and hope you earned....I am teaching today so best of luck for the rest of the day but it may well be a quiet drift day as an expiry day today.
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zefy zefy
Thanks! Trades here completed and profits banked too. Great stuff!!!
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fxtime fxtime
Yeah :-) A good call of yours.
It isn't worth trading a retrace move this late in the week imho so keep your profits and have a great weekend.
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zefy zefy
Thanks and have a great weekend too!
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Neil D Neil D
Weird on oil charts now as continuation has rolled in to July, so chart looks healthier............whereas contract chart for July itself looks toppy! ah well just have to go with it lol.............will add if I see weakness on Monday
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fxtime fxtime
zefy...remarkably the market did return to the second deviation !!! Stupidly I didn't trade it as its an expiry day and the market seemed to be becoming illiquid. LOL.
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fxtime fxtime
Neil as described above the weekly adx is a concern but dailies imply a drop so my guess is the underlying trend as it were is up but first we have a retrace....xom chart attached. Annoyingly I screengrabbed the chart then realised its hourly but you have the daily above anyway.
I remain short !
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kom75 kom75
For us500 std devs do you use previous day open/close of instrument or open/close of us market? Dou you trade this strategy from morning uk time or wait for us open? Thanks
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fxtime fxtime
Usually I trade the std dev on the SP500 from 2hrs before the first USA economic release or the opening bell which ever is the earliest HOWEVER never on FOMC days.
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fxtime fxtime
Very tight range today so tomorrow should be good :-)
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kom75 kom75
And what about calculation?
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fxtime fxtime
Sorry Kom I should have added that for tomorrows trades I would use todays daily range as a reference point eg high, low and close and as usual Iwould also look at the close two days prior also for and additiional marker...I can't remember what that article was entitled as but referred to 22% of trading range eg 0.22 x range etc etc.
Chart attached as an overview fwiw.
Today looked like this chart...the ''C'' was Fridays close and I would determine skew and std dev entry points and mark as such.
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fxtime fxtime
Obviously if the RSI line is below a bearish skew line you have a stronger signal and vise versa if the rsi is above the central line and above the skew trade entry point you also have a stronger long signal.
Hopefully all seems sensible? Not sure if I have posted this type of worksheet here before?!
Have a good evening mate,
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kom75 kom75
Thanks. I was just little bit confused. Now everything is clarified:). Have a good evening mate. Wait for your next Wednesday's lesson;)
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fxtime fxtime
LOL....hopefully the next article brings the last two together to make more sense :-)
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fxtime fxtime
kom seems the market wanted to move quickly today :-)
Sadly I only opened a long at 11:30(ish) this morning as seeing clients so opened at 2053.50 and manually covered at 2055.5 so roughly got the std dev trade but assume you fared better.
Have preset orders now for
short at 2045.5 cash mkt looking for 4pts. skew trade
short at 2045.0 (std dev 1) seeking 2042.5 or lower (2nd std dev)
Yesterdays trade range was very tight hence small profit target percentiles but if possible I willlet the trades to run. But first these orders need to trigger !
As we have had the bullish up move and now exceed the 2nd std dev I will look for a short opportunity along the 84% rule etc etc.
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fxtime fxtime
FWIW I suspect the 2060.00 region to be a reasonable pullback level today so I will watch that area for a trade entry back to say 2054.00 region !
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fxtime fxtime
Now short at 2060.00...expected resistance at 2061.00 eg yesterdays trading range added to last nights close value.
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fxtime fxtime
Obviously sopped out for -5 but watching the current 2071 level as still expect a retrace to 2054.00 by tomorrow !!
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zefy zefy
I have watched FESX whole afternoon to sell. No success so far...
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zefy zefy
I mean to short FESX.
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zefy zefy
Strange days today and yesterday....
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fxtime fxtime
Low vol yesterday and sudden change in liquidity today ...seemed more a stop run move imho. Yellen is the big event this week not the new homes data we have had today.
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zefy zefy
And the next big event this week is of course your new article tomorrow!
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fxtime fxtime
LOL...my next article title has been amended/edited and I have wondered what the TF editorial team will do about the bordello reference for supply/demand curves LOL.
Zefy is it better for me to post charts like the std dev curve above with the relevant current daily values or the articles for building strategies? The articles need to be overlayed with each other and I wonder if the slow drip drip drip approach of the articles might be missing their mark? Last weeks was more an algo function which may be off the mark for traders here? LOL It is a learning curve for us all :-)
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zefy zefy
I think this works very well like it is now: new article every Wednesday explaining theory and then the article continues in comments/live examples. At least for me your articles have provided so many new ideas that I haven't programmed all of them to my system yet but will sure try those. So I really appreciate the possibility to add comments and get answers/clarifications later.
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fxtime fxtime
Hmmm good point I hadn't considered if the updates were of worth. To be honest I have to teach commercial sector staff and you see them say once a qtr and just assume they get the theory and live trade examples LOL....so stupidly I hadn't considered whether the updates would be relevant. The std dev and bell curve overlay with rsi and skew is worth programming/back testing mate....I have checked on past history and it hasn't been posted here before as I may well be jumping ahead with that as it was supposed to be a future article about the bell curve !
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zefy zefy
Actually, I already combined theories from your previous articles and my system now already shows std dev levels overlay with rsi plimsoll line :)
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zefy zefy
Use of skew is not included in my system...has there been article or discussion about skew overlay here already?
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fxtime fxtime
LOL...may I suggest an adaptation? Look at the std dev and bell curve above....assume on the bell curve that the central close price is the 50 value line then overlay your true rsi 5 above or below the central bell curve value as shown.! You can enhance your probability of profit.
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fxtime fxtime
Yikes have I not described skew?
Let me look back....if I haven't then I will write one ASAP and post before next weeks article.
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fxtime fxtime
OK will write one ASAP on skew for you.....as this site doesn't operate a library system for articles only but also includes commentary too that it is hard for me to look back and find the skew system but on its own it is ultra reliable. I'll come back to you soon mate. Sorry about that.
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zefy zefy
No problem. And RSI enhancement works already in my system, I programmed it as a price distance between close price and price at 50 value line.
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fxtime fxtime
Yeah it is a good control factor that.
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kom75 kom75
just seen your post. Yesterday move suprised me. How far can it go? is your tp at 2015 still valid? could you also tell me how you calculated 2 std dev? range for cash mkt was 12.5 pkt. multiply by 0.28 I've got 2045.5 which is roughly what you've got, but for 2nd std dev (multiply by 0.47) I've got 2043.3, nearly 1point higher than yours. where did I mistake? sorry for so (too) many question;)
Btw. as for your articles I agree with zefy. is good as is now. thanks for your job:).
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fxtime fxtime
kom the aberration in figures were mine as I worked them out in my head whilst travelling so sorry for the confusion. I am off site at present but will post a medium term chart later for you if that helps? Thx for the feedback too :-)
Remember that post about missing a move? It is still relevant and worked today but look at the chart on that article and see what happened subsequently.
https://www.tradingfloor.com/posts/trading-a-missed-move-7206136
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kom75 kom75
yes, i remember as well as your last week post regarding inside close on gbpusd chart. worked well:). I hope to play this again today or tomorrow. cheers
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fxtime fxtime
Cable made two signals,,,one was already a short but we also had a minor overlapping long for +45 !!

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