Charlie presentation 2
- 1. Winning mindset for trading
- 2. Winning mindset • This presentation was going to cover mindset but.... • So we are going to run through some techniques I use instead....
- 3. The bands
- 4. The bands • The bands can be used in a variety of ways; • Trend. • Counter-trend. • Breakouts.
- 5. The bands
- 6. The bands • This utilises 2 moving averages but in a slightly different way to normal. • We are going to use a 5 period exponential moving average twice! • Instead of the moving average set to the closing price.... • We will place one 5ema set against the low price and one 5ema set against the high price. • It will then make your chart look like this...
- 7. The bands
- 8. The bands • So we are looking for certain instances to buy when price hits the lower band when the overall trend is up • We are looking for certain instances to sell when price hits the upper band when the overall trend is down.
- 9. The bands
- 10. The bands • Rules for buying (long plays). • Price making higher highs. • Price needs to be above the 50sma. • After a fresh cross of the 8 and 20sma’s. • Look for the first time price pulls back to test the lower band. • Buy when the lower band is hit. • Place stop based on either of the following; prior low, below 20sma or based on the ATR multiple. • Profit zone is the previous high or above....
- 11. The bands • You can wait for a reversal (conservative approach) and then buy. • In this instance you would place stop loss order below the most recent low.
- 12. The bands
- 13. The bands • Rules for selling (short plays). • Price making lower lows. • Price needs to be below the 50sma. • After a fresh cross of the 8 and 20sma’s. • Look for the first time price pulls back to test the upper band. • Sell when the upper band is hit. • Place stop based on either of the following; prior high, above 20sma or based on the ATR multiple. • Profit zone is the previous low or below....
- 14. The bands • Rules for selling (short plays). • Price making lower lows. • Price needs to be below the 50sma. • After a fresh cross of the 8 and 20sma’s. • Look for the first time price pulls back to test the upper band. • Sell when the upper band is hit. • Place stop based on either of the following; prior high, above 20sma or based on the ATR multiple. • Profit zone is the previous low or below....
- 15. The bands
- 16. The bands • Variations of rules. • Price not making higher highs etc. • Profit target static at 1:2 risk reward. • Wider stops. • Subsequent tests? • Moving stop loss to break even once price has moved so far. • Using different timeframes.
- 18. Overlaying MACD • We’ve run through the basic principles of the bands. • Where they become more powerful is where lined up with MACD. • Use the higher timeframe MACD in line with the bands. • So if taking a 15 minute band play, we want the hourly MACD histogram to be in line.... • If taking an hourly band , we want the 4 hour MACD to be in line....
- 19. Overlaying MACD
- 20. Overlaying MACD
- 21. Overlaying MACD • We want the higher timeframe confirmation....
- 22. Overlaying MACD
- 23. Overlaying MACD
- 24. Overlaying MACD • Plus we would prefer the trend to be in line too....
- 25. Overlaying MACD
- 26. Overlaying MACD
- 27. Overlaying MACD • We won’t always have everything lined up from a trend perspective so that comes down to reading the overall market. • Let’s look at some live charts...
- 29. Counter-trend bands • It’s worth noting the odds on daily charts... • Once price closes back inside the bands, there’s around a 65% probability of it going on to test the opposite band. • This is useful information. • More so when we are looking at the higher timeframes and then using that info to help us with our trade. • Let’s first look at how we can use the bands for counter-trend entries... • Remember, it maybe counter-trend on one timeframe but....
- 32. Counter-trend bands • Is this really counter-trend?
- 35. Counter-trend bands • When looking at a counter-trend trade, wait for price to close back inside the bands first. • Saves trying to catch the bottom. • So if price pulling into a key support zone on an hourly chart, why not wait for a close inside the 5 or 15 minute bands before entering? • RSI divergences....
- 39. Counter-trend bands • So we can use the bands as a pure trend pullback approach but also if looking to go counter trend. • Let’s look at some live charts....
- 40. Final thoughts.... • To get 2 free days access to our live trading room, sign up using this address; • www.ezeetrader.com/showfx