followNev wrote:FocalPip wrote:Hi Nev,
Can you tell me how you determine what is a stop hunt and what is the top of a leg on your AUD/USD H4 chart? Thank you.
Personally I don't think in those terms, so can't help you there. However, if I were to describe my methodology based on everything I have ever learned and cleared up by Captain Jacks teaching it would be.
1. Scan Daily charts for Reversal / Topping Patterns eg. Inside Day, Tweezers, RRT's, Pin Bar, Hammer, Shooting Star, Hanging Man, morning or evening star, spinning top.
2. Scan H4 charts for Reversal / Topping Patterns. as per D1
Draw a Trend Line to see if there is any confluence with a trend line bounce, as most times a trend line holds rather than breaks. Also, now that I am aware of the Trend Line patterns called Bump and Run Reversal i'll be very mindful of how that will be potentially effecting things.
When the Trend is established, look to see if there are 3 clear pushes. Then try and determine whether the Reversal or Topping chart pattern is at the end of the potential 3rd push ?
If there is confluence with the above, move down to a m15 chart.
Look to see whether there is any sign of a M or W forming as described by Captain Jack.
Double bottoms = Buy
Double tops = Sell
However, personally I will always wait for the candle to confirm by closing (in the direction of the trade) across an 8 ema , moving average.
From then on its trade management.
My style of managing the trade is to get to Break Even, then wait for a swing high or low, can be confirmed with the CCI indicator, when the Swing is established i move the stop to it, eventually getting stopped out for whatever the market could give me.
http://www.thepatternsite.com/CandleEntry.html - candle stick patterns
http://stockcharts.com/school/doku.php? ... n_reversal - bump and run reversal
http://www.candlestickforum.com/PPF/Par ... estick.asp - candlestick patterns
http://www.investopedia.com/terms/g/gartley.asp - variations of double bottoms and tops, with a bit of maths.
http://www.investopedia.com/terms/s/swinglow.asp - swings for placing stops
http://www.dailyfx.com/forex/education/ ... Forex.html - how I trade by using the CCI (for confirmation only)
What I am learning is that there are a lot of ways to describe the same thing. Essentially there is a trend or a range. Whether it be Elliot Wave theory, a 123 or ABC-D pattern, the idea is to recognise the 3 pushes and try not to lose all your pips in the ranges/consolidation periods.
It is better to buy low and sell high, so even when trading a breakout , wait for a higher probability set up, where the market pulls back.
I have read a tonne of books and paid for courses. Everything you need to learn can be learnt by reading everything Captain Jack writes. Best of all its free, clear and very concise.
Don't get bogged down with the whys and wherefores. Stop Hunts, Consolidation periods, ranges, distribution and accumulation just relates to support and resistance. For that , just look left on your chart and see where it happened before. Try to Not enter a trade directly into know support or resistance as you'll get spooked out of your trade when it reverses or gets whipped about.
.. Maybe a little rise up before NY close. Btw today was really crazy day.. 