SWG123 » Mon Apr 14, 2014 6:31 pm wrote:If there's anyone confused about oceans, skies and lakes, try this: press F8 and deselect "Chart on Foreground". Hides all candles behind indecision, so only trade when they reappear, using your normal entry criteria. At least that's how I've been looking at it - please shoot me down if I'm wrong Doug, still getting my head round it.
Ocean is below all the ribbons, sky is above all the ribbons, lakes are in-between the ribbons.
It is one of those analogies that you make and realize that it is causing more confusion than knowledge
It was not original with me though because I remember John using it. Yes Steve you got it correct although I trade with my candles in the foreground but it may be helpful to some to have them hidden. I really need to get a few videos done on the basics. I will try to get them done with in the next 3 days.
With Bobs indicator I will have to look at some of these alarms. I do not think we need exit alarms on the lower time periods when we have such good charts. While I like to trade counter trend I need to look at what the indicator is calling counter trend. I really do not know how best to adjust this indicator because I really have not read all of Bobs stuff on it yet We want to know entry and observe if volume is present. Indicators can reset and fool you but volume does not lie. Truthfully I do not trade when that little Power rating chart is 10 or less on the 4 hour. As it goes higher than the currencies that are strong naturally rise to the top of the left hand column. Since it is done by absolute value it does not mater if slope is negative or positive. So if AUD is strong it rises. There is a fellow working to build a better indicator that does a little better job at this and I gave him some input. I hope he is able to pull it off.
My thought are this. 10.7 plus will make for a complete system all the way up to the weekly.
10.7 on the lower time periods will need vetting. Will it really have an advantage over a regular stoch. If you are active in the market do you need all these alarms. Can I make this indicator do what I want it to do. Will it play nice. I really have to read and re-read Bobs description of it use. What I expect might happen it that there will be some currencies that just trade best on an hour or four hour period. Others may be better day trading on the 15 or 30 minute. It may be the indicator will be best used on the higher time periods were it will give you solid signals less frequently but not freak you out with so many alarms.
The ribbons are not as confusing to me because I studied them years ago based on a minute scalping setup. Oh the horror
However I was led to believe they could not be done on any other time period. That system used a dual trend CCI and some other indicators. This kind of reliance on a CCI gets complicated and some people spend more time trying to figure out the indicators than trading the chart. So the ribbons actually have room to breath on the higher time periods. That means there is more that can be learned from them. They are less reliant on indicators. I really believe I could trade the chart with just the Volume indicator and Ribbons. However a cycle indicator can give us some hints of overbought, oversold, and or divergence. it is easy to use for most people and the volume will keep it honest. I liked using that CSS indicator on the charts but as you go down in time it is subject to noise. There is no way to adjust it really. I tried blowing it up in size but doing so clips off the peaks.
I think if you can get your head around the idea that the market must have some momentum. Volume must be showing some increase. If you can read the white and red bars at least on the volume indicator than that will give you an idea of a move beginning or ending. What happened before. Would you expect price to move even farther from the mean or counter trend some. What would that look like on the chart. Price leads and gray followed by the blue followed by the green might result in a pause or slight consolidation. A counter trend move back over the gray, blue, green etc could occur. I think there will come a time when we can look at chart ribbons, look at an indicator, look at volume and recognize the entry. Exits are pretty easy because you have pivots, round numbers, edges and you actually get to see rejection by a time period, pivot or round number and know this is a good time to take profit.
Now consolidation and range will be trade-able. The 15 minute will become the standard time period to do that on because with the 15 minute you have a 5 minute shadow ribbon. That becomes our support and resistance in range trades. Of course there will always be tight accumulation consolidation that can not be traded accept for a break out strategy.
So lets look at the chart below and I will not write on it. I will talk about it.
audjpymm15.png
Can you identify Trend ... Bullish or was it really.
Strong CSS is a given. I would use the indicator if it always looked like this.
Before the trade even starts what do you see in the volume indicator. A period of low volume on Friday and now Monday followed by Mondays two exhaustion climax down bars White. A big Red bar. Think Start of up trend. This all before entry. Now enter and there is a fall off in volume but price has already picked up some momentum. Than volume picks up again as traders join in. Always think about what could be going on.
Price crosses the ribbon at where the X crossover is located on the Grey but it is an elongated area but that is ok. So what next. Price crosses blue and Bobs average and Green. Than smacks into the four hour edge that is just not going to be penetrated.
So what next. All the other ribbons will get to the brown four hour eventually. Time a day. As the day gets into the US afternoon and Aussie session low volumes doom price from getting past that four hour. Time of week coming off the weekend usually makes for a slower Monday. What else do I know.
I can tell one thing for sure. I do not even remember when I imaged this chart. However if you look to the left of the chart where you cannot really see. I guarantee you would have seen that there was a counter trend trade probably into the ocean below just by how the ribbons followed price.
It is a visual trading method. The more you look at the charts the more you will notice. In reality if you are trading intraday the only ribbons that will be of much consequence most of the time is the 240 and down. Videos will be good because I will open a chart and just pick it apart. I will not cherry pick them but go through them as I find them. Above I would have taken profit at the four hour when it rejected.
Thanks for your kind words Steve. Everyday is a joyful experience.
Happy Trading
Doug
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