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united46 · 29-09-2004, 20:58

Hi Gogga

Today was an interesting day and I wanted to add some comments to my previous post on how I use 820trend with real market conditions.

I don't always trade in the direction of 820 on a daily. Here's why:

Today, my favourite pair GBP/jPY traded down and I traded it from the short side using 820 on a 60,15,5.

Price action recently was key. This pair has moved over 600 pips in the last 6 or so days. This put the pair over 400 pips over the 20ema. If you look back, you'll find that in almost every situation when this has happened, either up or down, price has retraced to the emas. I use a 5 period rsi with osold obought set at 15 & 85 to confirm this. This pair had a great run but had to be running out of puff?? I think you need to be able to interpet price action to trade well, not just rely on indicators etc.

Also, yesterday the candle had a long tail on the daily. My interpetation of this ( and anyone else who uses candles), buyers running out of steam perhaps.

Using these observations, I wanted to trade from the short side if yesterdays low was breached despite 8 being above 20 on a daily.

Getting up today for the start of trading at 7am gmt, I find that the 8 is below the 20 on the 60 and 15. Also yesterdays low has already been breached. I am now looking for entry, preferably on some sort of pullback.

At 8.30 there is a nice pullback to declining 20ema to give a nice entry. Other observations at the time was a resistance zone at 201.35 and M2 was at 201.45so we are in a zone. As this pair is already down 80 or so pips on the day, I also check ATR ( it's about 180) so I know there is room to play with.

I covered half at 40 pips. Also, there was news on UK GDP, trade deficit at 11am so I had a stop on the other half to get me out with a 10 pip profit if required. News was baddish so fell about 60 pips in 20 mins.

There were then 2 nice retracements to the 20ema and I added to the position again on the 2nd one. All closed at 5pm when I wrap up and there was a double bottom plus we've gone over ATR. Superb day for me. I'm pleased as punch.

The reason for telling you all this.... just to show how I use 820 trend. More importantly, how I use it in conjunction with price action etc.

I know most people like something a bit more sexy than emas. However, you can use this simple technique with others very effectively.

Really, what I'm saying is that 820 does work as a standalone technique, but it's much better when mixed with some others and an understanding of price/market action.

Hope this helps.

Go Boks

UNited

29-09-2004, 20:58	#10 (permalink)
united46 level 3 Join Date: Jun 2004 Posts: 248 Rep Power: 0	Putting it all together Hi Gogga Today was an interesting day and I wanted to add some comments to my previous post on how I use 820trend with real market conditions. I don't always trade in the direction of 820 on a daily. Here's why: Today, my favourite pair GBP/jPY traded down and I traded it from the short side using 820 on a 60,15,5. Price action recently was key. This pair has moved over 600 pips in the last 6 or so days. This put the pair over 400 pips over the 20ema. If you look back, you'll find that in almost every situation when this has happened, either up or down, price has retraced to the emas. I use a 5 period rsi with osold obought set at 15 & 85 to confirm this. This pair had a great run but had to be running out of puff?? I think you need to be able to interpet price action to trade well, not just rely on indicators etc. Also, yesterday the candle had a long tail on the daily. My interpetation of this ( and anyone else who uses candles), buyers running out of steam perhaps. Using these observations, I wanted to trade from the short side if yesterdays low was breached despite 8 being above 20 on a daily. Getting up today for the start of trading at 7am gmt, I find that the 8 is below the 20 on the 60 and 15. Also yesterdays low has already been breached. I am now looking for entry, preferably on some sort of pullback. At 8.30 there is a nice pullback to declining 20ema to give a nice entry. Other observations at the time was a resistance zone at 201.35 and M2 was at 201.45so we are in a zone. As this pair is already down 80 or so pips on the day, I also check ATR ( it's about 180) so I know there is room to play with. I covered half at 40 pips. Also, there was news on UK GDP, trade deficit at 11am so I had a stop on the other half to get me out with a 10 pip profit if required. News was baddish so fell about 60 pips in 20 mins. There were then 2 nice retracements to the 20ema and I added to the position again on the 2nd one. All closed at 5pm when I wrap up and there was a double bottom plus we've gone over ATR. Superb day for me. I'm pleased as punch. The reason for telling you all this.... just to show how I use 820 trend. More importantly, how I use it in conjunction with price action etc. I know most people like something a bit more sexy than emas. However, you can use this simple technique with others very effectively. Really, what I'm saying is that 820 does work as a standalone technique, but it's much better when mixed with some others and an understanding of price/market action. Hope this helps. Go Boks UNited